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DOL Misclassification Initiative Focuses on Drug Reps, Farm Hands and Home Nurses

May 8, 2012 – 4:45 pm | By Khristine Scholtz | No comments yet

Whether an employee is exempt from the FLSA has been a turbulent topic this year, as both DOL and Congress have been issuing proposals and bills regarding exempt jobs. DOL has been involved with the status of pharmaceutical representatives, in-home caregivers and children working on farms. Although no changes have yet been made to the FLSA’s exemptions, the focus on exempt employees reflects DOL’s enforcement “misclassification initiative,” as seen in DOL’s FY 2013 budget request. The largest portion of the increased budget ($4 million and 35 new investigators) is intended to go toward this DOL initiative. The exemption actions occurring within the last year are briefly described below:

• Pharmaceutical Representatives: DOL went head-to-head with SmithKline Beecham Corp. before the Supreme Court in April, arguing over whether the FLSA’s “outside salesmen” exemption applies to these representatives. DOL argued that since these representatives are unable to actually make a sale (rather, they are promoting a drug or product), they cannot qualify as salesmen. SmithKline Beecham countered that the representatives’ pay structure and independent work time conformed with the definition of an outside sales representative under the FLSA, and that the representatives are making a sale in the only  way that is legally permissible. The Supreme Court is expected to decide at the end of June.
• In-Home Caregivers: DOL has proposed removing domestic caregivers from the FLSA’s exemptions, thereby allowing such workers to minimum wage and overtime compensation. There have been several opportunities for public comment on the proposal, and DOL has extended the public comment period multiple times in order to gather information on the topic. After receiving thousands of public comments, DOL is expected to issue a final rule this summer.
• Children on Farms: DOL recently rescinded a proposal to change the FLSA’s exemption for children working on farms. Among other restrictions, the proposal would have prohibited children from operating motor vehicles and also eliminated the exemption provided to graduates of a 4-H safety program. DOL’s rescission of the proposal was in response to concerns that the proposal would have harmed family farms and the rural way of life.

If you are an employer using any of these types of employees, keep an eye on future developments, and recognize that DOL is very concerned with proper classification of employees. Even if you don’t employ someone in one of these categories, you need to be sure your employees are properly classified, particularly in light of DOL’s “misclassification initiative.”