Did you know that hour and wage issues in the life sciences industry are regulated pursuant to 29 USC §§ 201–219 under the Fair Labor Standards Act (FLSA) and several related wage orders and state statutes? For this reason and perhaps for the purposes of recordkeeping, overtime, and meeting the minimum wage, the proper classification of employees as exempt or non-exempt is the most significant hour and wage challenge within this industry.
As a continuation of our discussion, this blog post is an overview of how to classify exempt employees in the life sciences industry properly.
How to Properly Classify Exempt Employees in the Life Sciences Industry
The Fair Labor Standards Act (FLSA) provides applicable exemptions that employers must satisfy when classifying employees in the life sciences as exempt. This implies that an employer is required to show that the responsibilities of an employee’s job satisfy, in addition to a minimum salary threshold, the provisions with regard to executive, administrative, or professional exemptions. Accordingly, an employer must make sure that the primary responsibilities of a job meet specific criteria when it comes to executive, administrative, or professional exemptions. The criteria include:
- Executive exemption – the responsibilities of such a job comprise (1) managing an enterprise (subdivision or department), including customarily or regularly directing how one or more employees carry out their duties, (2) authority to recommend and suggest when and how other employees should be promoted, advanced, fired, or hired and (3) authority to fire or hire other employees.
- Administrative exemption – the responsibilities of such a job entail performing non-manual or office work that is directly linked to the general business or management operations of the employer or the clients, which involves the exercise of independent judgment and discretion on significant business matters.
- Professional exemption – the responsibilities of such a job entail the performance of work that requires an employee to be knowledgeable of an advanced type in a field of learning or science customarily acquired by an extended course of intellectual training.
It is crucial to note that it is not the qualifications of the employee, the job description, or the job title, but the reference to the employee’s actual responsibilities that must be met by each of these standards of exemption. Accordingly, it goes without saying that it is the sole responsibility of the employer to prove and demonstrate that, based on the executive, administrative, or professional nature of their jobs’ essential tasks, employees are exempt. In line with the FLSA’s provisions, while the types of positions once viewed as exempt are insufficiently circumscribed by regulations, the case law toward classifying more positions as non-exempt is a clear trend.
It is also important to note that where different levels of seemingly exempt, “professional” employees, such as sales and marketing personnel, chemists, analysts, and researchers are employed, it is a challenge to avoid misclassification of employees in the life sciences industry. Accordingly, such employees may, in fact, be non-exempt depending on factors such as the attainment of various recognized forms of “advanced expertise and knowledge” or higher-level degrees. However, irrespective of such factors, misclassification claims could always arise when employers in the life sciences industry assume that the employees are exempt.
In Part VIII of this series and our blog post titled “Damages Available to Plaintiffs in FLSA Misclassification Claims,” we shall move the discussion forward by hammering on the damages entitled to FLSA plaintiffs who prevail in misclassification claims in the life sciences industry.
In the meantime, stay tuned for more legal guidance, training, and education. In the interim, if there are any questions or comments, please let us know at the Contact Us page!
Always rising above the bar,
Isaac T.,
Legal Writer & Author.