Labor: When employees are eligible for multiple FLSA overtime exemptions

Employers should try to keep all their options on the table

Employers who use outside sales representatives have long relied on the Fair Labor Standards Act’s (FLSA) outside sales exemption to justify non-payment of overtime premiums for these employees. Later this year, the Supreme Court will determine whether pharmaceutical sales representatives, who do not actually make any direct sales, satisfy all of the requirements of the FLSA’s outside sales exemption.

In the meantime, the 7th Circuit recently reminded employers that the outside sales exemption is not the only exemption under the FLSA that may apply to an outside pharmaceutical sales representative and that employers generally should keep all FLSA exemption options open when analyzing job classifications.

In addition to reminding employers that multiple FLSA exemptions may apply to a particular job, Schaefer-LaRose is instructive because it sets forth the court’s application of the facts to the administrative exemption test and highlights the fact that the 7th Circuit is willing to disregard the Department of Labor’s (DOL) interpretation of the exemption as amicus curiae.

Employers should bear in mind the potential challenges of keeping all options on the table. The DOL’s current “Right to Know” initiative is a potential challenge. Although the DOL has voluntarily delayed implementation of this rule as of the Fall 2011 Unified Agenda, it will likely revive this effort in the near future, especially if President Barack Obama is re-elected. Under this rule, the DOL intends to make employers more “open and transparent” to their employees.

Contributing Author

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Christine McLaughlin

Christine Liu McLaughlin is a shareholder in Godfrey & Kahn, S.C.'s Labor & Employment Law Practice Group in the Milwaukee office and is chair of the firm's...

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Contributing Author

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Rufino Gaytán

Rufino Gaytán is an associate in Godfrey & Kahn, S.C.'s Labor & Employment Law Practice Group in the Milwaukee office. Rufino assists private and public employers in addressing...

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