Working Two Jobs to Make Ends Meet: Paying Employees Working Exempt and Non-Exempt Jobs

Franczek P.C.
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Back in 2012, my colleague Bill Pokorny discussed how to properly pay a non-exempt employee who worked two jobs for an employer. This past week, one of my other colleagues and I were discussing a twist on this situation: what if an exempt employee works in a non-exempt job, or vice versa? As Bill and Ed Druck discussed during our recent higher education wage and hour webinar, this situation is not that uncommon. A non-exempt school district employee might perform exempt duties as a coach, or perhaps an exempt administrator might drive a bus. At one of my former employers, our receptionist doubled as our graphic designer for a couple of years. How should you pay employees who perform both exempt and non-exempt duties? Are “mixed duty” employees ever entitled to overtime? 

The Primary Duty is Key

The fact-dependent answer to the question is: determine the employee’s “primary duty.” Under the FLSA regulations, an employee cannot hold multiple statuses. He or she is either exempt for all purposes or non-exempt for all purposes. To know which status applies to a mixed duty employee, you need to know which tasks constitute the employee’s “primary duty.” The FLSA regulations define “primary duty” as “the principal, main, major or most important duty that the employee performs.” The regulations explain that the “[d]etermination of an employee’s primary duty must be based on all the facts in a particular case, with the major emphasis on the character of the employee’s job as a whole.” This primary duty definition is one that you should recognize. Employers use this test to determine whether the employee qualifies for an overtime exemption. For example, under the regulations, an exempt executive has a “primary duty” of managing the business, or some recognized department or subdivision. Similarly, both the administrative and professional exemptions contain primary duty tests.  

Because an employee can only hold one status, a non-exempt employee whose primary duty is performing non-exempt work will also be considered non-exempt under the FLSA when performing exempt duties. Similarly, an employee whose primary duty is exempt will still be exempt even when performing non-exempt duties. As with any wage and hour issues, there are some exceptions that you need to remember. First, the percentage of time spent performing exempt or non-exempt duties is important, but not dispositive. FLSA regulations explain that while an employee who spends more than 50% of his or her time performing exempt duties will generally be exempt, nothing in the regulations actually requires that employees spend more than a majority of their time performing exempt duties. Second, even non-exempt duties might fit into the regulatory category of duties that are “directly and closely related” to an employee’s regular exempt work and therefore can be counted toward an employee’s primary duty. Finally, remember that state laws might impose a requirement that an employee perform exempt duties for a particular percentage of time to qualify for the exemption. Again, the primary duty test is always a fact-dependent determination.  

Paying a Mixed Duty Employee

Once you determine the employee’s primary duty that will dictate how you must pay the employee under the FLSA. If you determine that the employee has primarily non-exempt duties, you must pay him or her at least 1.5 times the regular rate of pay for any hours worked over 40. Even if the employee performs exempt duties part of the time, you must compensate the employee as if he or she works non-exempt duties all of the time. 

However, if you determine that an employee’s primary duties are exempt, then you do not need to provide any overtime compensation to that employee, even when the employee performs non-exempt work. (However, you can elect to do so. The FLSA regulations state that an employer may provide exempt employee with additional compensation without losing the exemption or violating the salary basis requirement, under certain conditions). 

In short, the analysis for mixed duty employees is little different than the one for any other employee. With some help from wage and hour counsel, identify what your employee’s “primary duty” is and pay him or her accordingly. Remember as always to check state laws, as they may present different limitations than those under the federal FLSA.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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