Allowing Employees To Assign Their Own Exempt Status an FLSA Violation

October 24, 2003 ( - An employer assigning exempt status determinations to employees unfamiliar with the Fair Labor Standards Act (FLSA) were found to be in violation of FLSA provisions.

The US District Court for the Western District of Michigan found the process to be blind in its execution and therefore flawed under the purposes of FLSA.   Thus, the employer was liable for double liquidated damages for its failure to pay overtime to employees incorrectly classified, according to a CCH report.

The employer attempted to argue it had reasonable grounds for its actions and should not have been held liable for liquidated damages or any amount thereof, not to exceed the amount specified in Section 16 of FLSA.   The court turned to the facts of the case and found no reasonable grounds to make the determination of good faith on the employer’s behalf.

In the case of Martin v Indiana Michigan Power Co , the employer allowed plant supervisors to assist employees in determining how they would be classified under the FLSA – either exempt from overtime pay or non-exempt.   However, the plant supervisors were not knowledgeable in the standards used to determine whether an employee was exempt and, as a result, many non-exempt workers were not paid for work done in excess of a 40-hour workweek.