Posted by Tamara
There are several occupations in the United States that are classified as salaried exempt, meaning they are not entitled to overtime pay. Recently, the guidelines for two of these occupations, outside salespeople and exempt administrators, have come under scrutiny by the U.S. Department of Labor or DOL.
The DOL has been taking a stricter view of these regulations and is taking action against employers that stray over the line.
Pennsylvania employers would be wise to pay attention to the recent interpretation of the regulations and examine the duties of their salaried exempt employees. The DOL is working with a backlog of opinion letters. Once these letters are signed, they carry the full force of the law. All courts must defer to the DOL opinion letters.
An example of the DOL’s reexamination of the regulations is the recent litigation with Novartis Pharmaceutical Corp. The DOL issued an opinion that pharmaceutical reps can not be classified as salaried exempt employees. They do not meet the FLSA standards for outside salespeople or for exempt administrators. This opinion will have an affect on every drug company in the United States.
The point of the opinion stated that though pharmaceutical reps work with very little direct supervision, they do not have the autonomy of a salesperson. The reps cannot legally sell the medication, or take an order for them. They don’t exercise independent judgment, but rather implement company policy in nearly every aspect of their jobs.
They cannot be classified as exempt administrators, either. Though the reps schedule they own time and appointments, they don’t exercise independent judgment on important matters.
The U.S. Department of Labor is responsible for approximately 10% of the wage and hour enforcement in the county. Many states, however, follow the federal guidelines for assigning exempt status.
Pennsylvania employers should reexamine the duties of their salaried exempt employees to ensure the guidelines are being met. These workers may need to be reclassified as non-exempt.
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