Exempt vs. nonexempt – Special investigators challenge insurer’s classification

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Abstract: This article examines a court case in which an insurance company’s investigators sued to be classified as nonexempt, believing that the company was taking advantage of their exempt status to avoid paying overtime. The court used a three-prong test in determining that the employees were indeed exempt. But the case shows why it’s important that employers carefully examine how an employee’s actual duties play into the company’s larger operations before deciding on an appropriate “exempt vs. nonexempt” classification. A sidebar looks at a similar case, in which the plaintiff argued that employees who spend less than 50% of their time on administrative functions don’t qualify as exempt. Foster v. Nationwide Mutual Insurance Company, No. 12-3107, March 21, 2013 (6th Cir.) Schaefer v. Indiana Mich. Power Co., No. 02-1401, Feb. 13, 2004 (6th Cir.) Altemus v. Federal Realty Investment Trust, No. 11-2213, July 31, 2012 (4th Cir.)