Watching The Clock

Are sales assistants eligible for overtime pay? Several plaintiffs attorneys think so. Prudential Securities, PaineWebber, Raymond James Financial and Salomon Smith Barney have already settled overtime-pay lawsuits that covered sales assistants nationwide. Merrill Lynch is currently negotiating an overtime claim, and Morgan Stanley Dean Witter is facing overtime charges from several Colorado employees.

Are sales assistants eligible for overtime pay?

Several plaintiffs’ attorneys think so. Prudential Securities, PaineWebber, Raymond James Financial and Salomon Smith Barney have already settled overtime-pay lawsuits that covered sales assistants nationwide. Merrill Lynch is currently negotiating an overtime claim, and Morgan Stanley Dean Witter is facing overtime charges from several Colorado employees.

What factors make some employees “exempt” from overtime pay requirements while others are “nonexempt”?

The governing law is the federal Fair Labor Standards Act (FLSA). It is a Depression-era statute that mandates time-and-a-half pay for anything beyond a 40-hour workweek. The key determinant is whether job duties are at least somewhat clerical. Pay is not a determinant.

There are three exemption categories from overtime pay requirements—executive, administrative and professional. (Most brokers are exempt under a separate provision for commissioned salespeople.)

The professional exemption applies to “learned” professions—doctors, lawyers, CPAs and scientists.

With the executive and administrative categories, a “duties” test is applied. FLSA defines an executive as someone whose primary duty is management and who customarily supervises two or more employees. But even a senior sales assistant who supervises the work of others could be eligible for overtime. That’s because the FLSA also states that if a worker spends more than 20% of his or her time on clerical duties, the employer cannot claim the executive exemption, according to a Department of Labor (DOL) spokesperson.

An administrative employee, as defined by the DOL, performs office work directly related to management policies or general business operations. The employee can exercise discretion and independent judgment in performing these duties. But if the work is at least 50% clerical, that person cannot be classified as exempt, the DOL spokesperson says.

How do job titles affect overtime pay status?

They don’t. The DOL spokesperson says job titles cannot be used to determine whether an employee is exempt. “It’s the actual duties and the day-to-day work,” the spokesperson says.

What’s in a Name?

Sales assistant titles have become an issue in overtime claims.

Salomon Smith Barney is facing allegations that some sales assistant job titles it uses are designed to avoid overtime pay requirements.

In a pending wage-and-hour case in Miami federal district court (King et al. v. Salomon Smith Barney), four SSB sales assistants claim they were given the title of “senior registered associate” during 1998 and 1999, which exempted the firm from paying them overtime. But the plaintiffs say their duties did not change.

Tampa, Fla., attorney Jonathan Perlman, who filed the case, is also attempting to get discovery into why SSB created another job category of “technical analyst,” a title some assistants now apparently hold. Technical analysts are assistants who work for brokers and produce materials such as newsletters and client reports, Perlman says. He thinks it might be another job category that’s eligible for overtime.

An SSB spokesperson says, “We are responding to Mr. Perlman’s allegations in court. Any further comment would not be appropriate.”

The case is on hold until the court sorts out a feud between Perlman and another Tampa lawyer, Jonathan Alpert, who has a similar (and competing) case pending against SSB.

Merrill, MSDW Overtime Cases Still Pending

Plaintiffs’ lawyers argue that wage-and-hour suits should have national class-action status.

Both Merrill Lynch and Morgan Stanley Dean Witter have unresolved unpaid overtime suits against them.

This past March, the U.S. District Court in Tampa issued an order allowing a prospective collective action overtime lawsuit to proceed against Merrill Lynch. The case, filed in June 1998, was in settlement negotiations as of late August, according to the plaintiffs’ law firm, Johnson Blakely Pope Bokor Ruppel & Burns of Tampa, Fla.

The negotiations are “confidential, so we can’t comment at this time,” says a spokesperson for the law firm. Merrill would not comment either.

Meanwhile, the plaintiffs’ attorneys handling a wage-and-hour suit against Morgan Stanley Dean Witter have been unsuccessful in getting their lawsuit certified as a national action despite a long battle. The MSDW case, filed in a Denver federal court in 1996, remains limited to three women who worked at a Denver branch office.

One of the plaintiffs’ attorneys, Sharon Snyder, with the Washington, D.C., law firm of Cohen Milstein Hausfeld & Toll, says she plans to appeal rulings that have so far kept the dispute a local matter. No trial date has been set, but the plaintiffs are aiming for March next year.

Snyder is attempting to combine an overtime complaint with a discrimination claim. The suit maintains that unpaid overtime impacts female office workers disproportionately and is therefore a form of discrimination.

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