Employers should be aware that the US Department of Labor (DOL) has ramped up its scrutiny of payroll practices by staffing companies, through comprehensive audits targeted on overtime classification. Of late, the DOL particularly appears hyper-focused on whether employers are properly relying upon two separate exemptions in order to avoid overtime obligations: (1) the computer employee exemption; and (2) the highly compensated employee exemption.
As an initial matter, many national and regional staffing companies play a vital role in providing critical staffing resources for the burgeoning IT industry. In most cases, individuals hired by staffing companies to perform various roles as IT consultants receive a substantial hourly rate for work performed.
If an individual qualifies for this exemption, staffing companies are not required to pay any overtime beyond forty (40) hours even though the individual’s compensation is tied to an hourly rate. (As opposed to other professional exemptions, these employees do not need to be paid on a salary basis to be exempt, as long as they receive at least $27.63 an hour.)
Employers should understand that while job titles alone are not dispositive, the computer employee exemption generally covers “[c]omputer systems analysts, computer programmers, software engineers or other similarly skilled workers in the computer field” who perform certain identified primary duties.1 To fit within...
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