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April 10, 2008
Must Exempts Get Time-and-a-Half for Extra Work?
A large group of Maryland corrections workers filed a grievance over a new requirement that they fill in for nonexempt employees after their regular hours. The governor had ordered the prison system to reduce overtime by $127,000 a year, and having exempt officers perform extra duties was how the system coped with the mandate.

What happened. A memo in early 2003 from the warden of the Eastern Correctional Institute informed supervisors that, in order to save overtime costs for nonexempt personnel, the supervisors would be required to perform extra duties beyond their 40-hour work week. They would be given straight compensatory time for every extra hour they worked. Further, only supervisors below the rank of major (that is, lieutenants and sergeants) would be given the extra duties. The warden's memo also noted that 14 correctional employees had been called up for military service, increasing the workload for their remaining co-workers.

However, less than a month later, 40 correctional supervisors at the prison filed a grievance, demanding both to be paid time-and-a-half for extra hours and not to be required to perform any nonexempt duties. Presumably, they resented the idea that they would take over their subordinates' jobs after hours, and be compensated for doing so at a lower rate than subordinates would have earned. They argued that Maryland's State Personnel and Pensions law stipulates that they should not perform tasks inappropriate to their rank; in addition, though, they said that state and federal wage laws demand that they be treated as nonexempt when doing that extra work.

The administrative law judge who heard their complaint considered only the federal Fair Labor Standards Act (FLSA) and concluded that because the supervisors were exempt from the act, they remained exempt while doing the extra work and were not eligible for time-and-a-half compensation. The supervisors appealed to a state circuit court, which affirmed the judge's ruling. In September of 2007, the Court of Special Appeals agreed to consider the case.

What the court said. State appellate judges agreed that the question was one of federal rather than Maryland law. They reviewed the following conclusions made by the administrative law judge: The supervisors were and had been exempt employees throughout the litigation. Further, Maryland's governor had authorized the prison's plan to reduce overtime expenses. Next, under FLSA's salary-basis test for exemption, the supervisors all earn more than the required $250 a week: On an annual basis, lieutenants earn a minimum salary of $35,660, and captains are paid at least $38,007, with majors earning more.

And, although their extra work had admittedly been done in the past by their nonexempt subordinates, the fact remained that the supervisors still spent more than half their time performing exempt duties. They managed people, instructed and evaluated subordinates, recommended improvements in the overall operation and safety of the prison, and regularly directed the work of two or more employees.

Before appellate judges, the supervisors argued that they never should have been classified as exempt, claiming that they merely "carry out the planning of their superiors, and may make recommendations that are subject to and must be acted upon by the superiors." But judges were unable to find fault with the administrative judge's reasoning and conclusions: The supervisors were qualified for the administrative employee overtime exemption under FLSA. So the supervisors again lost their case and must pay court costs. Colburn et al. v. Department of Public Safety and Correctional Services, Court of Appeal of Maryland, No. 41 (2008).

Point to remember: In many cases, state wage and hour laws are stricter than the FLSA--clearly covering more employees, for example--and must be followed by employers in those states. But in the case of Maryland's wage and hour law and the state's statute regarding public employees, judges found that all the provisions follow and are subject to FLSA. They reviewed a number of interpretive regulations in considering the case but found there was no reason to reclassify the supervisors as nonexempt for all or part of their work.

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