Exempt or Non-Exempt, That Is The Question!

Disclaimer:  John Ragsdale is not qualified to give legal advice about personnel and salary issues and this post should be taken as input, not a directive.  Please work with your HR professional to clarify how workplace legislation applies to your environment.

OK, glad that’s out of the way!  I started my career as a tech support agent in 1985 (thank you for telling me I don’t look that old) as an hourly worker.  We were paid night time differential for shifts past 7pm and of course overtime when we had to “take a customer home” and work very late or early on a particular ‘hard down’ problem. When I moved to Silicon Valley ten years later, tech support agents at high tech startups were salaried workers and in those days we all worked 80 hour weeks and sleeping under your desk was not uncommon…and it never occurred to any of us we should be paid overtime. It was a cultural thing, not a legal issue.

Oh, how times have changed.  A member inquiry this week about paying overtime or a salary differential for agents scheduled for after hours beeper support set off a brouhaha among our SMB member community.  Here’s the scoop:

In 1990, the Fair Labor Standards Act (FLSA) required employers to pay their employees at least the federal minimum wage, and overtime for all hours worked over 40 in a work week (note some states, like CA, define overtime as 8 hours in a 24 hour period). However, the FLSA included a number of exemptions from the minimum wage and overtime requirements: “any employee employed in a bona fide executive, administrative, or professional capacity” were exempt and could be paid a straight salary, regardless of hours worked, with no overtime.

Herein lies the rub. The 1990 FLSA did not define what “executive, administrative, or professional” meant, and there have been numerous updates to the legislation to clarify these roles ever since. In 1990 and 1992, the US Labor Department added the “Silicon Valley Exception,” permitting computer systems analysts, computer programmers, software engineers, and other similarly-skilled workers in the computer field to be exempt. In order to be exempt, the role must pass a number of “duty tests,” one of which states that a ‘professional’ employee “have a primary duty of work requiring knowledge of an advanced type in a field of science or learning customarily acquired by prolonged, specialized, intellectual instruction and study.”

To the lay person (and to me) technical support roles fit into this duty test, but that is why lay people get into so much legal trouble. In recent class action suits large technology companies have been forced to reclassify their tech support agents as non-exempt and eligible for overtime. It doesn’t mean agents are suddenly raking in the dough, however. Exempt employees have a larger salary to compensate for additional hours and responsibilities, and agents are seeing their base pay cut when converted back to hourly workers. If the company puts a freeze on overtime, the agents will not make up the difference in pay, leaving many of them (I’m guessing) sorry they made an issue of it in the first place.

We are doing a call with some members later this month and will talk about this issue.  I would love to find out from all of my support readers:  are your tech support agents exempt or non-exempt?  If you don’t want to publicly add a comment about how your company is handling this, please send me an email (jragsdale@thesspa.com) and I will keep your input confidential.  Please take a moment and weigh in on this issue; I’m happy to send you all copies from any published research that results.

I would also like to thank John Blakeman, VP Global Support Services at Taleo Corporation, for providing great insight on this issue and nudging me to get involved.

Thanks for reading, and thanks for collaborating on this hot topic!

Explore posts in the same categories: Best Practices, Enterprise Support, Technology

4 Comments on “Exempt or Non-Exempt, That Is The Question!”

  1. John,

    I think part of the distinction depends on whether or not the tech support engineer/rep/etc. has any kind of meaningful management responsibilities… such as being a team leader, training/cross-training others, serving as an escalation point, or supervising others.

    Bear in mind, I too am NOT a lawyer. I don’t play one on TV (or even during Webinars/teleseminars).

    A lot of times though the owners/managers want to put on blinders or their wishful thinking hats.

    The other caveat? Our constituency isn’t just IT services business in the U.S.

    We’re global with computer consulting firms that depend on us in USA, Canada, the UK, Australia, and many other different places with VASTLY different labor laws.

    I think the best advice because everyone’s situation will vary a little is to consult with a local qualified attorney.

    Thanks for the great post and for getting me thinking that perhaps we need to beef up our staffing/hiring report.


    Joshua Feinberg

  2. jragsdale Says:

    Thanks for chiming in Joshua! I agree, if the techs have direct reports they should qualify under the management exemption. I can’t imagine having to conform to all the international labor requirements. Hang in there! –John

  3. Hello John,

    Apologies if this question is not related to this topic. Are there any Whitepapers or reports on the Call Centre Benchmarks and Best In Class industry metrics. This would cover metrics like: Call Answer time, call bandon rtate, average hold time, average cal duration, average cost per call.

    Many thanks.

    Aleks Muncan

  4. sandy caricato Says:

    i am a supervisor, however, most of my duties are non supervisory and i do the same work as subordinates when needed.(90%non supervisor duties) currently i am exempt, but i have filed a wage claim because i felt i was misclassified. my employers are going to reclassify me as non-exempt and have me do the same duties (with the exception of a few tasks that a supervisor would do) and they are going to pay my back wages of overtime for the last 4 years. the money part has been settled, however now they are trying to negociate with my lawyer to demote me, cut my rate of pay and cut my hours to only 8. can they legally make all these changes? i’ve been employed there for 16 years and the current rate of pay i received is due to raises throughout the last 16 years, not title. as far as my hours, i’ve been working 10-12 hours m-f for the last 16 years and now all of a sudden they want to set my hours from 6-2:30 with an unpaid lunch. no other employee leaves our work before 3:30 no other employee is forced to take an unpaid lunch. my lawyer is saying in order to reclassify me they have to change my title, meaning demote me. she also thinks i should take the cut in pay since it’s only 2.00 and cut in the hours. who’s side is she on anyway? at first she threatened my employers for retaliation and discrimination, but now all of a sudden she says i should settle for this.
    here’s my questions:
    is this retaliation?
    can they demote me?
    can they cut my pay?
    can they cuyt my hours so drastically?
    and should i get another lawyer?

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