Many software companies routinely classfy their implementation and troubleshooting consultants as exempt employees, not entitle to overtime. The Third District's holding in Eicher v. Advaned Business Integrators, Inc. 151 Cal.App.4th 1363 (2007) illustrates that many of such consultants are likely entitled to overtime compensation and are wrongfully classfied as exempt.
In Eicher, the consultant's duties were typical of a software employee. His work involved spending half of his working time in the office, and the rest of the time on the customers' site. The employee's work involved implementing his employer's software, helping the customers learn how to use it, as well as troubleshooting. The employer argued that the employee fell into the administrative exemption category. The court disagreed. One of the several requirements of administrative exemption is that the employee's work must be "directly related to management policies or general business decisions" as per the IWC wage oreder 4-2001. The court found that since the employee was not engaged in any management policies such as hiring or firing, did not negotiate contracts with customers and did not otherwise affect his employer's operation, his was a "production worker" entitled to overtime.
The employer argued that installation and troubleshooting are exempt administrative duties, relying on Levie v. AT&T Communications, Inc. N.D. Ga. (1990). The court distinguished the claimant in Levie, pointing out that in the latter case the employee, in addition to performing the stated non-exempt duties, also identified impacts of the work on the company's operations, as well as designed and coordinated project teams. The court reiterated that in Eicher, the employee had no such effect on how the company was run.
The above analysis demonstrates that whether a software consultant is entiteled to overtime is a very fact sensitive inquiry, where the court would carefully analyze the specific duties in which an employee is engaged before determining whether the exemption applies.
In Eicher, the consultant's duties were typical of a software employee. His work involved spending half of his working time in the office, and the rest of the time on the customers' site. The employee's work involved implementing his employer's software, helping the customers learn how to use it, as well as troubleshooting. The employer argued that the employee fell into the administrative exemption category. The court disagreed. One of the several requirements of administrative exemption is that the employee's work must be "directly related to management policies or general business decisions" as per the IWC wage oreder 4-2001. The court found that since the employee was not engaged in any management policies such as hiring or firing, did not negotiate contracts with customers and did not otherwise affect his employer's operation, his was a "production worker" entitled to overtime.
The employer argued that installation and troubleshooting are exempt administrative duties, relying on Levie v. AT&T Communications, Inc. N.D. Ga. (1990). The court distinguished the claimant in Levie, pointing out that in the latter case the employee, in addition to performing the stated non-exempt duties, also identified impacts of the work on the company's operations, as well as designed and coordinated project teams. The court reiterated that in Eicher, the employee had no such effect on how the company was run.
The above analysis demonstrates that whether a software consultant is entiteled to overtime is a very fact sensitive inquiry, where the court would carefully analyze the specific duties in which an employee is engaged before determining whether the exemption applies.
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