Are Your Professionals Sufficiently “Learned” or “Creative” To Be Exempt From Overtime?

Do you employ nurses? Graphics consultants or designers? Did you know that (in addition to other types of employees we have talked about here here and here) these employees may be entitled to overtime, too? What?! Aren’t learned and creative professionals exempt from overtime? The Fair Labor Standards Act  says so! What’s the problem, then? As the employer, you must be able to show that the job functions in question meet the actual requirements of these exemptions. Join The Emplawyerologist after the jump to learn more…

 Professionals usually get a decent,  fixed salary. How can they also be entitled to overtime? The answer depends in part on how you define “professional”. The FLSA recognizes two types of professionals for overtime exemption purposes, the Learned Professional and the Creative Professional.

Here are the criteria for  the Learned Professional  exemption:

• The employee must be compensated on a salary or fee basis (click here for a review) at a rate not less than $455 per week;
•  The employee’s primary duty must be the performance of work requiring advanced knowledge, defined as work which is predominantly intellectual in character and which includes work requiring the consistent exercise of discretion and judgment;
• The advanced knowledge must be in a field of science or learning; and
• The advanced knowledge must be customarily acquired by a prolonged course of specialized intellectual instruction.

What jobs satisfy these requirements? There are the obvious, such as the doctor or lawyer or accountant.  How about someone who does engineering work but does not have the actual degree or any advanced education or training?  Young v Cooper Cameron Corp 586 F.3d 201 (2d Cir. 2009), relying on DOL regulations, (specifically 29 CFR Sec. 541.308(a) said “No”. Why? The exempt learned professional must have advanced knowledge, “customarily acquired by a  prolonged course of specialized intellectual instruction”. Mr. Young, while he had 20 years of “engineering type experience” was a high school graduate. While he performed “draftsmen, designer and detailer” functions, his job only required a  minimum of 12 years’ relevant experience, and no advanced degree. The DOL regulation specifically says that it is “not the case that just anyone in the field of engineering will qualify for the exemption”. The court said that the employee must be more than just a highly skilled technician. The court cited Mr. Young’s lack of advanced education and training and the fact that his job did not require it, to conclude that Mr. Young, at most, was a highly skilled technician and not a learned professional.

How about a paralegal?  According to the DOL, paralegals generally do not qualify as exempt learned professionals.  The exemption may however be available for paralegals with advanced specialized degrees in other professional fields, who apply that  knowledge  in the performance of their duties. For example, if a law firm hires an engineer as a paralegal to provide expert advice on product liability cases to assist on patent matters, that engineer would qualify for exemption.

Are nurses exempt? The answer is a definite “maybe”!  Registered Nurses registered by a state examining board and paid at least $455 a week on a salary basis are generally considered exempt. If however the same R.N. is paid hourly s/he becomes non-exempt. A Licensed  Practical Nurse, which requires less education and advanced knowledge is not a an exempt learned professional. Hate to sound like broken record, but the title will not determine exempt status. The actual job functions and training/education required will.

Let’s move to one  of my favorite exemption categories, the Creative Professional. To meet this exemption the job functions must meet these criteria:

• The employee must be compensated on a salary or fee basis (as defined in the regulations) at a rate not less than $455 per week;
• The employee’s primary duty must be the performance of work requiring invention, imagination, originality or talent in a recognized field of artistic or creative endeavor.

Just how “creative” must the work be? Think of the fellow who came up with the formula for Cool Whip for Kraft Foods. If he was paid the FLSA weekly minimum on a salary basis, he was probably an exempt creative professional.  Let’s look at a few other real-life examples.

Journalists may or may not be exempt creative professionals. Those whose reporting lacks “the sophistication of the national level papers”, whose daily workload prevents them from conducting detailed news analysis  or investigative journalism (which are necessary for this exemption to apply) are not exempt creative professionals, according to Wang v Chinese Daily News, Inc. No. 08-55483 (9th Cir. Sept. 27, 2010). Similarly, reporters at small, community newspapers, who wrote articles about local events using public information and press releases are non-exempt, per the courts in Reich v. Newspapers of New England, Inc 44 F.3d 1060 (1st Cir. 1995), and Reich v. Gateway Press, Inc. 13 F.3d 685, 700 (3rd Cir. 1994). In contrast, a Washington Post reporter whose “job required him to originate his own story ideas, maintain a wide network of sources, write engaging, imaginative prose and produce stories containing thoughtful news analysis of complex issues” is an exempt creative professional. ( See Sherwood v. Washington Post 871 F. Supp.1471, 1482 (D.D.C. 1994). 

Are graphics consultants or designers exempt creative professionals? A litigation graphics consultant whose job was “to convey information about a case in an informative, easily understandable way to triers of fact” was not exempt, according to Kadden v. VisuaLex, LLC, No. 11 Civ 4892, 2012 WL 4354781 (S.D.N.Y.Sept. 24, 2012), because there was no indication that the employee needed to originate stories from scratch or produce complex analyses of or transform any facts given. The key is how much originality and real creativity is generated by the actual person performing the job.

OK, just one more interesting example. How about strippers? What do you think?  While the employer in 4 Exotic Dancers v Spearmint Rhino, et al, No. CV-08-4038 ABC (US. Dist Ct. C.D. CA 2008) argued for the exemption, the strippers felt that their work did not require “invention, imagination, originality or talent in a recognized field of artistic or creative endeavor”. I suspect the strippers are right, but that’s just my humble opinion. Since the court dismissed this case on an unrelated technicality, however, it never actually ruled on this issue.

One more note: If any of the employees described above, were paid $100,000 or more a year (at least $455 a week of which was on a salary basis) and they performed at least one exempt function articulated under the administrative, executive or professional exemption categories they would fall within the Highly Compensated Employee exemption. Remember, an employee can job fail to meet one exemption category but still meet another!

OK,  I did promise to wrap up this topic this week, but I still didn’t cover the exemptions for sales people, so stay tuned and we’ll do that next week — and then we’ll move on to a new topic — for real! Happy 2014 by the way!

Disclaimer: This post’s contents are for informational purposes only, are not legal advice and do not create an attorney-client relationship. Always consult with competent local employment counsel on any issues discussed here.

Click here to learn more about Janette Levey Frisch, author of The Emplawyerologist.

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