Are Information Technology ("IT") Specialists Entitled to Overtime Pay?

Posted on April 24, 2013 | Comments Off on Are Information Technology ("IT") Specialists Entitled to Overtime Pay?

Are Information Technology ("IT") Specialists Entitled to Overtime Pay?

Network operations engineers, information technology (“IT”) specialists, systems administrator/engineers, database administrators, network administrators, network analysts, desk support, regardless of titles given by employers, these employees are known to share  two things in common:  long working hours and high-risk overtime liability for employers. Many California employers classify their IT professionals as “white collar” exempt professionals, paying them a monthly salary and requiring them to work long

hours.  While such practice allows California employers to save thousands of dollars in labor costs, the employers must be aware that a proper classification of IT professionals is a challenging task even for the most seasoned employment lawyers.

Three Most Common Myths About IT Professionals and Overtime

It is important to dispel some of the most common myths about “IT” professionals and overtime exemptions.

1)      Just because an IT employee is paid a salary, it does not mean that he is not entitled to overtime. While a salary is an important factor in determining whether a professional is properly classified as an exempt employee, other factors need to be satisfied as well. Therefore, an IT professional can be a salaried employee and still be entitled to overtime if he works more than 8 hours a day or 40 hours a week.

2)      Just because an employer asks an employee to sign an agreement purporting to be an acceptance of the exemption status that does not mean that the employee is exempt from overtime. The contractual language labeling an employee exempt or corresponding job title has nothing to do with classification, what matters is the actual job responsibilities and duties.

3)      Finally, it is a responsibility of an employer to prove that an employee is not entitled to overtime under “white collar” exemptions. This means that if there is a legal dispute before the court or state employment agency over alleged misclassification, the burden is on the employer to prove that an employee is exempt.

IT Professionals can be Exempt from Overtime under Multiple Exemptions

Employers have a benefit of applying a number of “white collar” exemptions in order to qualify “IT” professional for an overtime exemption. Such “white collar” exemptions include: (1) computer professional exemption; (2) administrative exemption; (3) executive exemption; and (4) learned professional exemption. Therefore, for example, if the employer is unable to satisfy the requirements of a computer professional exemption, the IT employee at issue still can be found exempt under an administrative exemption.

Unfortunately, there is no bright-line rule for determining whether a particular IT professional is exempt from overtime. Determining the employee’s exempt status  is a fact-intensive task that requires a thorough understanding of all requirements under each exemption and a highly-detailed evaluation of the employee’s functions.

The Department of Labor held that the IT Support Specialist  Needs to be Paid Overtime

In October 2006, the United States Department of Labor (“DOL”) published an opinion letter concluding that the IT support specialist did not qualify for the administrative professional or computer professional exemptions. The DOL noted that the primary duty of the IT Support Specialist consisted of installing, configuring, testing, and troubleshooting computer applications, networks, and hardware. Therefore, the DOL concluded that maintaining a computer system and testing by various systematic routines to see that a particular piece of computer equipment or computer application was working properly according to the specifications designed by others were examples of work that did not require exercise of discretion and independent judgment within the meaning of the administrative exemption.  The DOL found that such duties did not involve, with respect to matters of significance, the comparison and the evaluation of possible courses of conduct, and acting or making a decision after the various possibilities have been considered as required by 29 C.F.R. § 541.202(a).

With respect to a computer professional exemption, the DOL analogously concluded that such exemption did not apply to the IT specialist because the primary duty of  the employee did not involve the “application of systems analysis techniques and procedures, including consulting with users, to determine hardware, software or system functional specifications.” 29 C.F.R. § 541.400(b)(1). Nor is the primary duty of the IT Support Specialist “[t]he design, development, documentation, analysis, creation, testing or modification of computer systems or programs, including prototypes, based on and related to user or system design specifications” (29 C.F.R. § 541.400(b)(2)), “[t]he design, documentation, testing, creation or modification of computer programs related to machine operating systems” (29 C.F.R. § 541.400(b)(3)), or “[a] combination of these duties, the performance of which requires the same level of skills.” 29 C.F.R. § 541.400(b)(4).

It is crucial to emphasize that the DOL’s opinion letter was based on the facts specific to a particular IT specialist and it does not suggest that each and every IT specialist is not exempt from overtime. The DOL does not exclude the possibility that some salaried IT specialists, who exercise discretion over significant matters of their employers, may well be covered by the administrative exemption.

Cases in Which Courts Found IT Specialists Were Exempt and Not Entitled to Overtime

In the following cases the courts held that IT specialists who customarily and regularly exercised discretion and independent judgment were employed in a bona fide administrative capacity within the meaning of § 13(a)(1) of the Fair Labor Standards Act Act (FLSA) (29 U.S.C.A. § 213(a)(1)).

Heffelfinger v. Electronic Data Systems Corp., 492 Fed.Appx. 710 (2012). A database administrator and senior systems administrator were found to be exempt IT employees because they performed non-manual tasks directly related to management policies or business operations of employer’s customers. Their duties entailed executing or carrying out  the client’s database policies by “developing and enforcing database standards and procedures,” “leading or participating in logical and physical database design,” and “reviewing system and programming designs to ensure efficient use of database resources,” among other responsibilities of a similar level of importance. They also affected policy by “monitoring database performance statistics and recommending improvements, advising systems engineers and updating management on database concepts and techniques, and researching new database technologies.”

 In addition, they “customarily and regularly exercised discretion and independent judgment regarding “matters of significance,” They distributed assignments among team members, monitored projects, and resolved disputes. They had the authority to recommend courses of action for achieving client specifications. For example, Heffelfinger suggested solutions to accomplish technical specifications received from the client, presented logical representations of network design which the client took under advisement, and provided advice on the feasibility of running different applications.

Combs v. Skyriver Communications, Inc., 159 Cal. App. 4th 1242 (Cal. App. 4th Dist. 2008). An employee who worked as a director of network operations for a wireless broadband Internet service provider was not entitled to overtime compensation because he was covered by the administrative exemption. Combs was responsible for maintaining, developing and improving Skyriver’s network, and his duties involved high-level problem solving, preparing reports for Skyriver’s board of directors, capacity and expansion planning, planning for the integration of acquired networks into Skyriver’s network, lease negotiations, and equipment sourcing and purchasing. Combs was Skyriver’s “quarterback” with respect to solving problems with the operation of Skyriver’s network. Combs was responsible for identifying, selecting, and integrating new equipment into Skyriver’s network after Skyriver acquired other networks. The many high-level job responsibilities listed in Combs’s resumé also supported a finding that he customarily and regularly exercised discretion and independent judgment with respect to matters of significance.

Bagwell v. Fla. Broadband, LLC, 385 F. Supp. 2d 1316, 1323 (S.D. Fla. 2005). A network operations engineer was exempt from overtime because his work was directly related to management policies or general business operations of the employer. He developed and improved network system to make it function reliably; wrote specifications for wireless network topology; wrote specifications for routers and switches used in network; designed and assured proper installation; maintained network availability and security; interacted with clients for support; consulted with clients for design and technical specifications; interacted with vendors for pricing and availability of materials; scheduled technical field staff for surveys and installations; recommended purchases of network equipment, evaluated emerging technologies, handled customer problems and complaints; assigned work to field technician;, solved problems with the network. He “sometimes spent most of his day problem solving and thinking about ways to improve the network,” and he “had the discretion to suggest … equipment purchases, and ways for improving and correcting the network.”

Koppinger v. American Interiors, Inc., 295 F. Supp. 2d 797 (N.D. Ohio 2003). A sole information technology employee for the company was found to be covered by an administrative exemption from overtime. His duties consisted of ordering replacement parts, recommending purchases of new software and hardware, installing software, and repairing equipment for the company’s computer users. When users called in with computer problems, he determined the priority of and when and how to handle those problems.

Lutz v. Ameritech Corp. 208 F.3d 214 (6th Cir. 2000). An IT employee was responsible for providing access to the intra-office computer network, implementing new programs, and solving network problems. He assessed the needs of clients, developed installation plans for access to the intra-company network, and coordinated with various departments to arrange installation and ensured that plans were implemented. While the employee argued that he mainly performed manual work because he analyzed network problems with diagnostic tools and manually installed computer equipment and software, the court found that  he was “accountable from end to end to insure that [the] network installation premise is up and running correctly,” which involved analyzing problems and implementing solutions. The court found this to be nonmanual labor directly related to the general business operations of the company.

Cases in Which Courts Found IT Specialists Were Non Exempt and Entitled to Overtime

The list of cases below presents examples where the courts have found IT specialists to be exempt under white collar exemptions and entitled to earn overtime compensation.

Martin v. Ind. Mich. Power Co., 381 F.3d 574, 581-84 (6th Cir. 2004). An IT Support Specialist responsible for installing and upgrading hardware and software, configuring desktop computers, and testing and troubleshooting equipment is not exempt as administrative employee under pre-2004 regulations because such work is not directly related to management policies or general business operations and is not of substantial importance to management or operation of the business. The IT employee was in no way involved in “advising the management, planning, negotiating, representing the company, purchasing, promoting sales, and business research and control.”  The IT employee’s job, instead, was to assist in keeping the computers and network running to the specifications and designs of others. The employee made no decisions that affected even the small segment of the company’s operations in which his work was performed. He did not determine what types of workstations, network, hardware, or software the employer used; he was not involved in the design or development of the network; he did not decide what software would be available to  the employer’s computer users or determined how that software would be configured; and he did not decide or recommend when equipment must be serviced or replaced. Rather, he set up and repairs parts of a system wholly designed and approved by others.

Turner v. Human Genome Scis., Inc., 292 F. Supp. 2d 738, 745, 747 (D. Md. 2003). The court found that employees who worked as computer system support technicians for employer’s information technology group were misclassified as administrative exempt employees and were denied overtime pay. The technicians were not members of a team whose job was to design, develop or implement any type of computerized information system supporting the work efforts of the researchers. Nor did they provide services to the company similar or analogous to those referenced in the regulations, such as “advising the management, planning, negotiating, representing the company, purchasing, promoting sales, and business research and control.” 29 C.F.R. § 541.205(b). Rather, Plaintiffs were simply the technicians who keep the company’s overall computer and technological systems operating. Maintaining a computerized business is, in this day, part of every company’s day-to-day operations and nothing in the record establishes that Plaintiffs had substantial involvement in anything more than general computer operating software and hardware.

Burke v. County of Monroe, 225 F. Supp. 2d 306, 320 (W.D.N.Y. 2002). Network administrators  whose work included installing and operating computer networks, analyzing hardware and software problems, testing, and problem solving did “highly-skilled work,”  were not exempt employees under the  pre-2004 administrative exemption. They did not decide what software was loaded, or whether to update the software on a particular system. They performed highly-skilled work when troubleshooting problems, but this is not evidence of discretion and independent judgment. See 29 C.F.R. § 541.207(c)(1). The majority of their work involved routine duties without the requirement of discretion and independent judgment called for in an exempt position under the FLSA. Their functions consisted primarily of following established standards to set-up and maintain computers and networks, following recommended procedures for troubleshooting and essentially performing functions more analogous to key punch operators than programmers.

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Our practice extensively focuses on investigating and auditing overtime law violations. We provide free case evaluations for California employees who are due overtime wages. If you work in California and you feel that you are owed overtime pay, feel free to call our office to set up a free case evaluation interview with our San Francisco overtime lawyers.

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