17 reissued Opinion Letters challenge the exempt versus nonexempt status of construction supervisors
In January 2009, during the final days of the Bush administration, 17 Opinion Letters addressing the Fair Labor Standards Act (FLSA) were released and signed by the acting administrator of the Department of Labor’s (DOL) Wage and Hour Division (WHD).
Opinion Letters are intended to both interpret and dictate the letter of the law (in this case, the FLSA). They address specific questions submitted to the DOL and provide guidance to employers and employees alike when it comes to deciphering and applying FLSA requirements to their businesses.
The 2009 Opinion Letters (listed here) address important questions about the exempt status of, among other positions, client service managers, business development managers, and construction project supervisors.
For the latter, Opinion Letter FLSA2009-29 claims construction project supervisors are, in fact, exempt from the FLSA’s minimum wage and overtime requirements … provided the salary basis of no less than $455 per week is met. In other words, project supervisors are not eligible for overtime pay, no matter how many overtime hours they work.
However, much to the joy of construction supervisors everywhere, the 2009 Opinion Letters didn’t make it very far.
On March 2, 2009, less than two months after the letters were issued and signed, the Obama administration withdrew those 17 Opinion Letters. They claimed the letters were never placed in the mail for delivery and therefore had not been made official. For eight years, the topic of Opinion Letters was dropped entirely.
That is, until now.
Earlier this year, on January 5, the DOL reissued the verbatim text of the 17 previously withdrawn Opinion Letters. The reissued letters are all signed by the WHD acting administrator, Bryan L. Jarrett, and renumbered FLSA2018-1 to FLSA2018-17. For construction project supervisors, clinical coordinators, and many more, the letters signify the end of overtime pay.
But, as always, the FLSA is not so black and white.
When it comes to the construction industry (or any industry, really), the exemption issue brings with it a mass of grey area.
For example: according to Opinion Letter FLSA2018-10, project supervisors must still pass a duties test in addition to being paid the base salary of $455 per week in order to be considered exempt. The law dictates, in order to be considered truly exempt, the supervisor’s primary duty must be “the performance of office or non-manual work directly related to the management or general business operations” and “include the exercise of discretion and independent judgment with respect to matters of significance.”
In other words, supervisors who are expected to work with tools, provide manual labor, and consult with the powers that be before making important decisions are likely still entitled to overtime pay.
If you’re not 100 percent sure where you or your employee falls on the exemption scale, we urge you to carefully read the Opinion Letters, consult your attorneys, and check with your employment counsel to avoid a potentially disastrous lawsuit with the FLSA.