The Fair Labor Standards Act: A Historical Sketch of the Overtime Pay Requirements of Section 13(a)(1) Page: 71 of 93
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CRS-66
- likely prioritized by the employer) can be said to be an executive or
administrative function, would that blue-collar worker still be non-exempt?289
It was a technical question (among many) that the Secretary and the
Administrator did not explore: but Eisenbrey expressed concern about definitional
issues involved. He suggested that despite claims "that blue-collar workers are
entitled to overtime, the rule limits overtime rights to 'non-management blue-collar
employees,' begging the question of who gets classified as a management blue-
collar worker, a seemingly new class of exempt workers that will grow significantly
under these new rules." He observed: "It appears that the management of a team
would transform a manual laborer or other blue-collar employee into a 'management
blue-collar employee,' leading to exemption and loss of overtime pay."290
Financial Services Employees. For the past decade, certain interests have
sought to have inside sales staff declared exempt from FLSA overtime pay
protection.291 Congress has not acceded; inside sales staff remain non-exempt. The
final rule, however, moves toward exempting at least certain inside sales staff from
wage/hour protection. Section 541.203(b) reads:
Employees in the financial services industry generally meet the duties
requirements for the administrative exemption if their duties include work such
as collecting and analyzing information regarding the customer's income, assets,
investments or debts; determining which financial products best meet the
customer's needs and financial circumstances; advising the customer regarding
the advantages and disadvantages of different financial products; and marketing,
servicing or promoting the employer's financial products. However, an
employee whose primary duty is selling financial products does not qualify
for the administrative exemption. (Bolding added.)
While the specified duties might "include work such as" those listed, it need not
include all of them: others, not listed among the examples set forth in the rule, could
also satisfy the requirement. As in other areas, the determinative factor would seem
to be one's definition of "primary duty." Since the final rule eliminates a percentage
factor with respect to performance of exempt duties (amount of time spent), a single
exempt function might be sufficient to trigger exempt status.
289 Becker of the AFL-CIO, in his May 4, 2004 testimony, refers to "a vague definition of
'primary duty' ... that requires application of a wide variety of factors and ultimately a
subjective judgment." He adds: "This vague and ultimately subjective test will lead many
employers to misclassify employees as exempt based on the employer's own notion of what
is 'most important,' thereby contracting coverage and increasing litigation."
290 Eisenbrey, Senate Appropriations Subcommittee, May 4, 2004.
291 See U.S. Congress, House Committee on Education and the Workforce, Subcommittee
on Workforce Protections, Hearing on the Treatment of Inside Sales Personnel and Public
Sector Volunteers Under the Fair Labor Standards Act, hearings, 105t' Cong., 1st sess., May
13, 1997; and CRS Report RL30003, Modifying Minimum Wage and Overtime Pay
Coverage for Certain Sales Employees Under the Fair Labor Standards Act, by William
Whittaker.
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Whittaker, William G. The Fair Labor Standards Act: A Historical Sketch of the Overtime Pay Requirements of Section 13(a)(1), report, May 9, 2005; Washington D.C.. (https://digital.library.unt.edu/ark:/67531/metadc820733/m1/71/: accessed July 18, 2024), University of North Texas Libraries, UNT Digital Library, https://digital.library.unt.edu; crediting UNT Libraries Government Documents Department.