February 23, 2007 / Issue No. 1-07
 
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AGC Events & Professional Development
Upcoming AGC Convention to Include Several Labor & HR Sessions
Plan Now to Attend the 2007 HR Professionals Forum June 7-8 in St. Louis
Internet Applicant Rule and EEO-1 Reporting Guidance Now Available as Digital Download
Compensation
DOL Finds Construction Project Superintendent to be Exempt Under FLSA
Collective Bargaining Yields Highest Increases Since 1990
BLS Releases Updated Data on Weekly Wages and Union Density
Construction Executive Salaries Up 5%
Labor Relations
NLRB Awards Plastering Work to Carpenters Over Plasterers
Training
AGC to Launch Newsletter Covering Training and Workforce Development Issues

  DOL Finds Construction Project Superintendent to be Exempt Under FLSA

The new administrator for the U.S. Department of Labor’s Wage and Hour Division, Paul DeCamp, recently issued an opinion letter addressing the exempt status of a project superintendent employed by an environmental engineering and consulting company under the Fair Labor Standards Act (FLSA). 

An opinion letter is an official ruling by the Division issued in response to an employer’s request for a ruling on a specific factual situation.  It cannot be relied on by other employers as a statement of the law but can provide them with guidance on how the Division interprets the statute.  DeCamp concluded that the project superintendent in question appeared to be an exempt employee based on the facts provided.

To qualify for exemption from the FLSA’s minimum wage and overtime rules, employees must meet certain duties and salary tests.  In the present case, it was assumed that the project superintendent met the minimum salary requirements and salary basis tests to qualify for exemption.  The question was whether the employee met the duties requirements for the executive employee exemption.  These require that: 

    1. the employee’s primary duty is management of the enterprise in which the employee is employed or of a customarily recognized department of subdivision thereof;
    2. the employee customarily and regularly directs the work of two or more other employees; and
    3. the employee has the authority to hire or fire other employees, or provide suggestions and recommendations as to hiring, firing, advancement, promotion or any other change of status of other employees that are given particular weight. 

With regard to the first requirement, a “primary duty” is defined in the regulations as “principal, main, major, or most important duty that the employee performs.”  Factors to consider in determining an employee’s primary duty include:

  • the relative importance of the exempt duties as compared with other types of duties;
  • the amount of time spent performing exempt work;
  • the employee’s relative freedom from direct supervision; and
  • the relationship between the employee’s salary and the wages paid to other employees for the kind of nonexempt work performed by the employee.

“The primary duty determination is based on all of the facts and circumstances in each individual case with the major emphasis on the character of the employee’s job as a whole,” DeCamp wrote.  “Further, although the amount of time spent on exempt work can act as a guide, time alone is not the sole test.  Generally, employees who spend more than 50 percent of their time performing exempt work will satisfy the primary duty requirement.”  The regulations contain a list of examples of activities that constitute “management.”  It includes the types of activities that the employer here said that the project superintendent performs, which include meeting with the client’s representatives, making decisions regarding the scope of work of subcontractors, and making purchasing decisions for the project.  

To meet the supervisory element in the second requirement, the employees supervised must be employed by the same employer.  Employees of independent contractors or subcontractors do not count for purposes of meeting the executive exemption.  Furthermore, shared responsibility for the supervision of the same two employees in the same department does not satisfy the requirement.  Based on the facts provided by the employer here, it seems that the project superintendent meets the supervisory requirement, DeCamp found.

In determining whether an employee’s hiring and firing recommendations are given “particular weight” in satisfaction of the third requirement, the regulations state that the following non-exhaustive factors should be considered: 

  • whether it is part of the employee’s job duties to make such suggestions and recommendations;
  • the frequency with which such suggestions and recommendations are made or requested; and
  • the frequency with which the employee’s suggestions and recommendations are relied upon.

The regulations further provide that the suggestions and recommendations generally must relate to “employees whom the executive customarily and regularly directs.”  However, the employee need not have authority to make the ultimate decision, and a higher-level manager’s recommendation may be given more importance.  Based on the employer’s description of the project superintendent’s role in making recommendations to the project manager regarding employee advancement, firing, and change of status, DeCamp found that the third requirement also seems to be satisfied.

For a link to the full text of this opinion letter (FLSA2007-3), click here.   For additional guidance on the FLSA, click here. [ return to top ]