Can Substitutions Impact Exempt Executive Status

Today’s burning question: Can substitutions impact an employee’s exempt status? What I mean is – if a battalion chief who is classified as an exempt executive is allowed to trade time (substitute) with captains or lieutenants that are “non-exempt”, would that have any bearing on whether the battalion chief qualifies as exempt or not? I looked at the US Department of Labor’s regulations on substitutions (specifically 29 CFR §553.31) and it dawned on me that if the BC could serve in a non-exempt position and vice versa, it may affect the executive exemption given the language outlined in 29 CFR §541.102 for management like activities.

Answer: Wow… tough question. To start, there are two tests to determine whether an employee is an exempt executive: the salary test and the primary duty test. An employee must satisfy both tests in order to be exempt and ineligible for overtime under the FLSA.

Your question goes to whether performing non-exempt duties might disqualify someone who is classified as exempt. In other words, the focus of your question is on the primary duty test.

The primary duty test for the executive exemption is explained in 29 CFR §541.100 and states essentially that to be an executive the employee’s primary duty must be management of the enterprise. That begs two questions: what is management of the enterprise and what does primary duty mean?

§541.102 explains what duties qualify as managerial:

Generally, “management” includes, but is not limited to, activities such as interviewing, selecting, and training of employees; setting and adjusting their rates of pay and hours of work; directing the work of employees; maintaining production or sales records for use in supervision or control; appraising employees’ productivity and efficiency for the purpose of recommending promotions or other changes in status; handling employee complaints and grievances; disciplining employees; planning the work; determining the techniques to be used; apportioning the work among the employees; determining the type of materials, supplies, machinery, equipment or tools to be used or merchandise to be bought, stocked and sold; controlling the flow and distribution of materials or merchandise and supplies; providing for the safety and security of the employees or the property; planning and controlling the budget; and monitoring or implementing legal compliance measures.

As for a definition of primary duty, it is the principal, main, major or most important duty that the employee performs.  Whether a certain activity is primary or not depends on the totality of the circumstances.

To better explain the issue, let’s consider someone who is clearly an executive, such as the manager of a restaurant. His primary duty without question is managing the restaurant. The fact he might have to perform non-exempt duties such as clearing a table or taking an order when the restaurant is busy, does not change the fact that his primary duty is managerial in nature.

Change the facts a bit: What if the manager spends 95% of his time waiting on tables and is involved in managerial activities only 5% of the time. At some point the manager is doing so much non-exempt work that his status as an executive may come into question. Can someone’s primary duty be something he only does 5% of the time? The answer to that question in a contested case would be up to a court, and perhaps a jury, to wrestle with.

Back to your question: Your question assumes the battalion chief is properly classified as an exempt executive. We will accept that assumption for the purposes of answering your question. What happens when an exempt battalion chief engages in non-exempt activities while subbing for a captain or lieutenant? Like the manager of the restaurant, so long as the battalion chief’s primary duty remains management of the enterprise, the fact he engages in non-exempt activities does not cause him to flunk the primary duties test. Could engaging in non-exempt duties potentially call his exempt status into question? Sure, just like the restaurant manager. There is a factual question there, requiring a trial to answer in a contested case.

The flip side becomes just as interesting. When a non-exempt captain or lieutenant substitutes for a battalion chief, and presumably takes on the primary duty of managing the enterprise, might the captain or lieutenant meet the requirements for being exempt? Theoretically, I suppose that could happen. I have never seen a case where either side of this convoluted hypo has ever been contested, but I suppose it is possible. Highly unlikely but possible.

One of the big factual questions will be whether a captain or lieutenant substituting for an exempt battalion chief for a few hours up to a full shift, actually exercises managerial prerogatives (exercise discretion in regards to matters of significance such as hiring, firing, budgeting, making purchases, etc.), or whether their actual role is to baby-sit the position during the battalion chief’s absence. Once again, there is a factual question that in a contested case would require a trial to answer.

About Curt Varone

Curt Varone has over 40 years of fire service experience and 30 as a practicing attorney licensed in both Rhode Island and Maine. His background includes 29 years as a career firefighter in Providence (retiring as a Deputy Assistant Chief), as well as volunteer and paid on call experience. He is the author of two books: Legal Considerations for Fire and Emergency Services, (2006, 2nd ed. 2011, 3rd ed. 2014) and Fire Officer's Legal Handbook (2007), and is a contributing editor for Firehouse Magazine writing the Fire Law column.
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