The Learned Professional Overtime Exemption: What You Need to Know

Robin Foret
January 23, 2010 — 2,892 views  
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The learned professional exemption to the Fair Labor Standards Act (“Professional Exemption”) is frequently relied upon to categorize employees as exempt from overtime when an employee is functioning in a highly skilled capacity.  Employers are often unaware of the limitations of the Professional Exemption.  Courts interpreting the regulation that creates this exemption often require that employees have some advanced degree or license that enables the employee to perform those specialized functions of his or her job.  Many employees are assigned exempt status under the Professional Exemption when, in fact, they do not qualify for this exception to the Fair Labor Standards Act (“FLSA”), and should be paid overtime for all hours over 40 actually worked in any given workweek.  Any Employer relying on this exception to FLSA is advised to review its practices and procedures to be sure employees labeled as “professionals” meet the specific requirements of this exemption.

 

WHAT IS THE PROFESSIONAL EXEMPTION?

 

Ordinarily, FLSA requires that employees be paid at least the federal minimum wage rate (currently $7.25 per hour), and be paid overtime (time and one-half) for all hours actually worked over 40 in any workweek.  Section 13(a) of FLSA enumerates several exceptions to those requirements for certain employees, the most common of which are: (1) the executive exemption; (2) the administrative exemption; (3) the learned professional exemption; and (4) the outside sales exemption.  For any one of the four exemptions to apply, the employee must earn a minimum salary of $455.00 per week and perform certain duties. The first two exemptions involve duties related to the actual management of the business operations of the employer, while the outside sales exemption requires that most of the employee’s time be spent away from the office. The Professional Exemption requires specialized academic training for entry into a professional field or specialty in which a certain level of education or license is required.

 

When other FLSA exemptions do not apply, an employer will frequently categorize a highly skilled employee as exempt under the Professional Exemption.  It certainly seems reasonable for an employer to assume that this exemption is proper when a high degree of skill and years of experience in an industry are required to perform particular tasks essential to the position.  But beware, what appears at first blush to be an employee who is obviously a professional is his or her field, turns out to not be so obvious.  This exemption mandates that the employee’s primary duty be the performance of work requiring knowledge of an advanced type in a field of science or the type of learning customarily obtained through a prolonged course of specialized instruction that results in a degree, as distinguished from an apprenticeship that develops skills in routine mental, manual or mechanical work.  The professional employee must perform work requiring advanced knowledge in the field of science or learning, and that the knowledge be the type “customarily acquired by a prolonged course of specialized intellectual instruction.” 29 C.F.R. §541.301. 

 

WHAT DO THE COURTS HAVE TO SAY?

 

Courts that have reviewed the Professional Exemption have focused on the importance of the educational component of this test. Recently, a federal court in New York decided Young v. Cooper Cameron Corp., No. 08-5847 (2d Cir. Nov. 12, 2009).  In Young, the court concluded that despite 20 years of experience in the engineering field, the lack of a college degree prevented employees from being classified as exempt from overtime under the Professional Exemption of FLSA.  Years earlier, the Fifth Circuit Court of Appeals in a Texas case, Vela v. City of Houston, 276 F.3d 659 (5th Cir. 2001) reached a similar conclusion regarding the Professional Exemption’s requirements.  In Vela, the Fifth Circuit Court determined that EMT/paramedics were not exempt from overtime because they failed to meet the necessary education requirement prong of the Professional Exemption test of FLSA.  In fact, many courts from various jurisdictions have been hesitant to qualify employees as exempt from FLSA under the Professional Exemption in the absence of some formal educational degree.

 

WHAT STEPS CAN YOU TAKE?

 

The bottom line is that it is difficult for an employee without an advanced academic degree or license to qualify for the Professional Exemption to FLSA.  For example, a certified public accountant or accountant with a college degree who exercises independent judgment likely qualifies for the exemption, whereas a junior accountant or accountant clerk performing mostly routine tasks are likely nonexempt.  Professionals such as licensed teachers, nurses and attorneys are generally exempt as professionals. Therefore, an employee who is performing in a position that appears at first glance to require a fair amount of skill and experience does not automatically translate into sufficient qualifications to meet the test for the Professional Exemption. It is prudent to review the qualifications and duties of any employee not being paid overtime based on the Professional Exemption to verify accurate classification.  

 

When an employer wishes to rely on the Professional Exemption despite some uncertainty as to its application, such employees should complete timesheets for the hours worked each week. In the event it is determined that an employee has been misclassified, there will be records to show what overtime, if any, is due.  Moreover, it is the employer’s obligation to have all nonexempt employees complete time records to show the hours worked each week.  The failure to maintain such records is not only a violation of FLSA, but can result in the employee using his or her own personal records to argue that he or she is entitled to overtime hours that were not paid.  An employer must keep such records for a minimum of three (3) years under FLSA.  

Robin Foret

The Foret Law Firm

Robin Foret practices in the areas of employment law, commercial litigation and specialty insurance defense claims. She handles a variety of employment matters such as theft of trade secrets, breach of employment agreements, non-competition agreements, wage and hour issues under the Fair Labor Standards Act (FLSA), discrimination and harassment issues under Title VII of the Civil Rights Act of 1964 (Title VII) and the Texas Commission on Human Rights Act (TCHRA), the Americans with Disabilities Act (ADA), Family Medical Leave Act (FMLA) issues, and the Sarbanes-Oxley Act (SOX). Robin has handled a wide variety of employment law matters for employers, as well as for executive-level employees, before agencies, and state and federal courts.