Second Circuit Clarifies the Administrative Exemption under the FSLA
In Whalen v. J.P. Morgan Chase & Co., the Second Circuit set out guidelines to help identify the jobs that fit into the administrative exemption under the FSLA. Employees who are deemed administrative are not entitled to overtime pay under the FSLA and California law. The focus of the inquiry is to identify the factors that distinguish “production” work from “administrative.” The driving factor is the nature of the employee’s duties. Production employees are those who work on the day to day, routine activities that are directly related to the output or product of the organization. Administrative employees, on the other hand, are not focused on the product or service provided by the organization, but work on running the business itself. Human resources associates, for example, are administrative employees because their work is focused on running the company and not on producing the product or service of the company. Likewise, advertising associates or accountants within a company are administrative employees because their work is focused on the operation of the company, not its product or service. In Whalen, the plaintiffs were loan underwriters for a bank that provided loans. Since the plaintiffs were directly involved with producing the companies produce (loans) they were deemed to be production oriented and not administrative and therefore entitled to overtime pay.
