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August 25, 2008
Were These Recruiters Exempt from Overtime?
Two Utah recruiters sued their former employer for back overtime pay, claiming they should never have been classified as exempt from the provisions of the Fair Labor Standards Act (FLSA). One key to their case lay in the differing descriptions of their jobs--one view from employees and the other from the employer.

What happened. The two recruiters were hired by Serco, which was under contract to the U.S. Army and the Army Reserves. Both were designated recruiters and charged with encouraging area men and women to enlist in either of the armed services. Serco was paid on a commission basis--whenever a recruit enlisted or reenlisted--and the two workers got commissions the same way. Perhaps because of that procedure, the contractor designated its recruiters as outside salespeople, thus exempt from FLSA.

The two men were initially paid $600 a week, with a nominal increase the year after they were hired. In court as former employees, one claimed he had worked 480 overtime hours and the other claimed he'd worked 596.5 hours, for which they both asked to be paid. A federal district court judge asked for job descriptions and got two quite different answers: The two workers said they worked mostly at Serco offices, cold-calling area residents to promote opportunities in the military. Serco countered that it expected recruiters to be in the community, "actively recruiting people through educational, parental, civic, military, religious, social, and fraternal organizations" and making presentations. The two sides agreed that recruiters could not actually recruit candidates: That task fell to the Army itself.

The district judge ruled in the employees' favor and devised a method of calculating back pay. Both sides appealed, with the employees asking for a different calculation method, to the 10th Circuit, which covers Colorado, Kansas, New Mexico, Oklahoma, Utah, and Wyoming.

What the court said. Appellate judges ruled that, because the employees weren't empowered to 'close the sale' with any recruits, they didn't satisfy FLSA's definition of outside salespeople. Judges affirmed the lower court's decisions, not only on the misclassification of the employees but also on the method of calculating their overtime pay. Clements and Gerber v. Serco, U.S. Court of Appeals for the 10th Circuit, Nos. 06-4316 and 07-4005 (2008).

Point to remember: Despite your job descriptions that categorize workers as exempt, if those workers describe their work as nonexempt and explain why, courts are likely to believe them. If they see themselves as nonexempt, you will need thorough documentation of why they should be considered exempt.

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