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DOL Issues Opinion Letter on the Executive Exemption — Construction Superintendent Is Exempt

Volume 6, Issue 3
March 2, 2007

The U.S. Department of Labor recently issued an Opinion Letter applying the Fair Labor Standard Act's ("FLSA") executive exemption to a construction Superintendent, determining that this particular employee was exempt from FLSA minimum wage and overtime pay requirements. To qualify for the executive exemption, the employee must: (1) be compensated on a salary basis of $455 per week or more; (2) manage the employer's enterprise as his/her primary duty; (3) customarily and regularly direct the work of two or more other employees; and (4) have the authority to hire or fire other employees or make weighted suggestions and recommendations as to hiring, firing, advancement, promotion or other status changes of other employees.

The Company seeking this Opinion Letter was an environmental engineering and consulting company which performed construction on miscellaneous government sites. The Company asked whether its Project Superintendent, whose primary function was to supervise the day-to-day activities of the construction project, was exempt from overtime and minimum wage requirements under the executive exemption. The Superintendent oversaw the work of subcontractors employed on the project and supervised the labor force employed for the project, which consisted of regular company personnel, project-specific temporary employees, and/or union personnel. The Superintendent met with client representatives, made decisions regarding the scope of the subcontractors' work, and made purchasing decisions as needed for the project. He supervised at least two employees throughout the duration of a project and made recommendations to the Project Manager regarding employee advancement, firing and change of status.

Assuming that the employee was properly paid on a salary basis, the DOL determined that this Project Superintendent qualified for the executive exemption. The DOL concluded that the Project Superintendent was engaged in management activities because he directed and evaluated the Company's employees, planned and directed the day-to-day work on the project, and determined the type of materials and supplies that would be used on and/or purchased for the site. Noting that the supervision of another's employees (such as the employees of a subcontractor) could not be factored into the analysis, the DOL determined that the Superintendent met the third prong of the executive exemption test provided he did not share responsibility with another exempt executive for supervision of the same two employees in the same department.

The Opinion Letter is based solely upon the specific duties engaged in by one company's employee and should not be relied upon to determine that all similar employees are exempt. Instead, the Opinion Letter should be viewed as a good refresher on the executive exemption and an illustration of how the DOL analyzes this exemption.

Employer Report articles are for general information only; they are not intended and should not be construed to be legal advice. Reading or replying to such articles does not establish an attorney-client relationship. In addition, because the subject matters and applicable laws discussed in Employer Report articles are often in a state of change and not always applicable to every type of business entity or organization, readers should consult with counsel before making decisions based on the same.