San Diego Job Descriptions: Are Your Employees Management or Non-Management?
Many employers skimp on their job descriptions (or generally avoid doing them). However, this is a mistake, particularly given the heightened protection that California law is providing for workers here in the Golden State. A good and accurate job description is necessary for all of the following legal issues:
- Recruitment/retention of qualified employees
- Grounds for termination/discipline
- Whether an employee is exempt or non-exempt for overtime and other purposes
- Legal defenses against claims of wrongful termination if a job is eliminated or combined
- Whether an accommodation should be given if there is a claim of disability
- Whether various statutory leaves (paid and unpaid) must be given and for what length
- Is an employee management or non-management?
- Issues with respect to classification of a worker as an “employee” or “independent contractor”
- And more
When writing your job descriptions, it is essential to consult with an experienced San Diego corporate attorney. One of the more important aspects of a job description is defining whether the work performed is managerial or non-managerial. This generally turns on factual questions about whether the employee exercises “discretion” or “authority” on behalf of the employer. The federal Department of Labor (“DOL”) has issued guidelines on this question under the federal Fair Labor Standards Act. The DOL has provided a helpful list of ten factual questions that can be used to determine how much “discretion” an employee exercises. See Fact Sheet here. The factual matters are these:
- Does the employee have the authority to formulate, affect, interpret, or implement management policies or operating practices?
- Does the employee carry out major assignments?
- Does the employee perform work that affects business operations to a substantial degree?
- Does the employee have the authority to commit the employer in matters that have significant financial impact? — for example, sign a contract on behalf of the company
- Does the employee have the authority to waive or deviate from established policies and procedures without prior approval?
- And more
In general, if two of these factors are present, under the DOL guidelines, the employee is considered to be managerial. Note that the definition of managerial does not turn solely on the method of payment. Often, employers will consider that an hourly worker is not managerial. However, the guidelines show that, under some circumstances, even an hourly worker can be considered managerial. Likewise, being on salary does not automatically make an employee “managerial.”
A case that illustrates the legal principles is Boyd v. Bank of America Corp., 109 F. Supp. 3d 1273 (US Dist. CD California 2015). In that case, various employees engaged in real estate appraising services sued their employer for various causes of action including failure to pay overtime. The employer defended the case by arguing that the appraisers were exempt employees. The court agreed that they met the criteria for being a salaried employee, but that was not sufficient. The court held that, despite being salaried, the appraisers did not meet the definition of managerial/exempt employee because they exercised no discretion or authority to bind the employer.
Contact San Diego Corporate Law
If you would like more information about drafting and implementing job descriptions and/or employee handbooks or other company policies and procedures, contact attorney Michael Leonard, Esq., of San Diego Corporate Law. Mr. Leonard proudly provides legal services to business owners in San Diego and the surrounding communities. Mr. Leonard can be reached at (858) 483-9200 or via email. Like us on Facebook.