In the case of Paganas v. Total Management Solution, LLC (TMS) and others, the 2nd U.S. Circuit Court of Appeals recently stated that Mr Paganas - the plaintiff - could still be entitled to overtime pay under the Fair Labor Standards Act (FLSA). This vacated a decision by the District Court who were instructed, on remand, to consider whether Mr Paganas qualifies for the administrative exemption under 29 C.F.R. § 541.200.
Mr Paganas had filed a complaint alleging that TMS violated the overtime wage provisions of the FSLA and the NYLL.
The plaintiff was employed by TMS as a building manager at St. John's University in New York from July 2007 to May 2014. His annual salary was $80,000 and his duties included ensuring the cleanliness of buildings; supervising 6 to 15 cleaners; directing cleaners in their work; reallocating workers when short-staffed and setting up rooms for meetings or events.
He attended a daily management meeting with his supervisor Richard Rossi, who was a director of site maintenance for TMS from December 2007 to March 2011. At these meetings Mr Paganas was given orders – by Mr Rossi – after which he (the plaintiff) selected the cleaners to carry out the orders and supervised them. Mr Paganas also had a separate agreement in which he was paid for overseeing athletic facilities during basketball games.
Although a collective bargaining agreement banned him from performing cleaning duties, Mr Paganas testified that he had performed nonsupervisory cleaning duties for 90 percent of the time. The District Court held that this testimony was not credited and found it to be untrue - determining that Mr Paganas’s primary duty was management.
In the discussion of whether the plaintiff’s primary duty could be classified as management under the executive exemption, the District Court cited language from 29 C.F.R. § 541.200(a)(2) - which addresses the administrative exemption. The executive and administrative exemptions should be treated separately as they require the employer to prove different facts regarding an employee’s work.
The Appeals Court stated that the District Court did not address the administrative exemption in its decision, remanding the case for further proceedings.
Professionals have pointed out that this case should serve as a reminder that employers should make periodic analysis of exempt employees' actual job duties, as despite an employee being called a manager and having authority to supervise, it does not always mean that the employee is exempt from overtime obligations.
