Mark Oberti Published in Construction Executive
"Complying with Overtime Pay Exemptions"

Mark Oberti's article "Complying with Overtime Pay Exemptions," was published in the July 2009 edition of Construction Executive. His article discusses the importance of understanding the Federal Fair Labor Standards Act (FLSA) requirements so that construction employers can avoid being on the wrong side of a lawsuit. The article notes that the FLSA generally requires employers to pay employees overtime pay (at the rate of one and one-half times their regular rate) when they work more than 40 hours in a workweek. However, some FLSA exemptions exist. Mark explains, "When an exemption applies to an employee, the employer may lawfully pay the exempt employee a set salary, with no overtime pay. Employers sometimes try to apply either the executive exemption or the administrative exemption to the law, with mixed results, in convincing courts these exemptions apply."

According to the article, recently, some construction project supervisors sued their employers, claiming they are entitled to overtime pay under the FLSA, a federal law that governs employee pay issues. In Gottlieb v. Construction Services & Consultants (CSSI), Inc., where the court imposed damages against CSSI, Mark explains, "Gottlieb's work did not require the exercise of discretion and independent judgment with respect to matters of significance," and for that reason, the administrative exemption did not apply. However, in Reyes v. Hollywood Woodwork, Inc., where the court found that Reyes was covered by the administrative exemption, Mark notes that, "This case turned out differently than the Gottlieb case because Reyes was an integral part of the company’s leadership team and regularly made important decisions about its projects and operations."

Mark predicts that the number of these lawsuits is expected to rise as more project supervisors lose their jobs during the construction downturn. He concludes, "Executive and administrative exemptions from overtime pay have strict, fact-specific requirements." He recommends that "employers should never assume project managers are exempt from overtime pay, and should ensure compliance with the law, seek guidance from a lawyer who is knowledgeable about the FLSA."