5 Questions About Township Employees and Overtime Pay in Michigan > Fahey Schultz Burzych Rhodes
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5 Questions About Township Employees and Overtime Pay in Michigan

March 2017

If you are a township official, you may be concerned about the Department of Labor's increasing enforcement efforts, and want to make sure that you are in accordance with up-to-date overtime regulations. If so, you're in luck! Leading up to the 2017 Michigan Township Association Conference, Helen “Lizzie” Mills has answered a few commonly asked questions concerning overtime rules to prep officials before her presentation, "Understanding the New Overtime Rules."

Wondering if Michigan township employees get overtime pay or have other questions about overtime rules? Here are 5 common questions to consider.

1. Are hourly employees the only type of employees entitled to overtime compensation?

No! Most employers believe that salaried employees are automatically exempt from overtime simply by virtue of being salaried at a certain rate. Although this is the most common overtime mistake, the Department of Labor is in no way forgiving when dealing with employers who make it.

Determining whether an employee is exempt from overtime compensation is a two-pronged analysis. The first prong of the overtime exemption test requires employees to be paid on a salary basis at a particular minimum annual threshold. Employees who do not meet this threshold must be paid overtime compensation for hours worked over 40 in a week, even if they are salaried. But that’s not all! Even salaried employees who meet or exceed the salary threshold test must still perform certain specified duties to be exempt from overtime wages: this is the second prong of the analysis. In other words, an employee who is paid a salary in excess of the minimum threshold may still be eligible for overtime pay, depending upon whether his or her duties fit within one of a few narrowly construed exemption tests.

2. What do you mean “even salaried employees who meet or exceed a certain minimum salary threshold may still be entitled to overtime?”

Meeting or exceeding a certain minimum salary threshold is only one prong of a two-pronged analysis for determining whether an employee is exempt from overtime compensation. The second prong of the analysis requires an in-depth look at the particular duties an employee actually performs on a day-to-day basis. This “duties test” cannot be met simply through a well-drafted job description and is not dependent upon job title. Instead, the employer must analyze that employee’s daily duties and match them with the duties outlined in one of a few narrowly construed exemption tests.

3. Are there any special overtime considerations given to department heads, who may very often work more than 40 hours?

Department heads often fit within the Executive Exemption for overtime liability. In addition to meeting or exceeding the minimum salary threshold, the department head must also perform certain duties as outlined in the narrowly construed Executive Exemption. These duties include primarily managing the department or subdivision thereof; customarily and regularly directing the work of at least 2 full-time employees; and possessing the authority to fire or fire, or to make suggestions and recommendations on this or other changes to an employee’s status. If the department head meets both prongs of that two-pronged analysis—the minimum salary threshold and the minimum primary duty requirements—then he or she will be exempt from overtime compensation for all hours worked in excess of 40.

4. When are police officers entitled to be paid time-and-a-half for working overtime?

Employees working in law enforcement activities are unequivocally authorized to work a limited number of hours in excess of 40 per week without overtime pay. Specifically, law enforcement employees are authorized to work up to 171 hours in a 28-day work period, or almost 43 hours per week, before overtime pay is required. Hours worked in excess of this amount must be paid at time-and-one-half, as though the Law Enforcement Exemption does not apply.

There are, however, certain restrictions within this exemption. No more than 20% of a law enforcement employee’s hours may be spent on work “which is not performed as an incident to or in conjunction with their law enforcement activities.” If an employee can demonstrate that more than 20% of his or her work was in non-law enforcement activities, the employer will be required to pay overtime for all hours worked in excess of 40. Also, this exemption cannot be applied to “civilian” employees of law enforcement agencies. This includes employees like dispatchers, maintenance workers, clerks, or stenographers. These employees must be paid overtime according to regular overtime rules.

5. Our receptionist is such a critical component of providing effective service to our residents that we pay him on a salary. Is he entitled to overtime pay?

That depends. It is possible for receptionists to fit within the Administrative Exemption for overtime liability; however, the determination hinges upon the specific duties that the particular receptionist performs. In addition to meeting or exceeding the minimum salary threshold, the receptionist must primarily perform office or non-manual work directly related to the management of the general business operations or customers, and exercise independent discretion with respect to matters of significance. If the receptionist meets both prongs of that two-pronged analysis—the minimum salary threshold and the minimum primary duty requirements—then he will be exempt from overtime compensation for all hours worked in excess of 40.

However, this exemption is commonly misapplied. The receptionist must be able to exercise independent judgment with respect to matters of significance, which refers to the level of importance or consequence of the work performed for the employer as a business, entity, or department. Therefore, while not impossible, it is highly unlikely that a receptionist would fit within the Administrative Exemption. Without an applicable exemption, he is entitled to overtime pay for all hours worked in excess of 40, regardless of the fact that he is salaried.

 


Overtime Rules Presentation at the MTA Conference

If you learned something here or want to know more about Overtime Rules, please attend Helen "Lizzie" Mills' event, "Understanding the New Overtime Rules," at 3:15-4:30 p.m. on Wednesday, April 12, 2017 at the Lansing Center.

Do you have another question about township law that hasn't been answered here? You may ask a question before the 2017 MTA Conference. Fahey Schultz Burzych Rhodes PLC's Township Attorneys will be answering your questions about township law during "Glad You Asked That!" at the 2017 Michigan Townships Association Conference.

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