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Accountants and Auditors without CPA Are Entitled to Overtime

If you are not licensed as a CPA, and you work for an accounting firm as a staff accountant, bookkeeper, auditor, data-entry worker, or an accounting clerk, you are probably no stranger to working long hours of overtime, especially during the period between January and April 15 of each year. You should know that, under the federal Fair Labor Standards Act (FLSA), an employee who works more than 40 hours in one week is entitled to overtime compensation. According to the FLSA, overtime is paid at 1.5 times your normal hourly rate for every hour over 40 hours that you work in any given week.

But I thought I was exempt?

Because these positions are widely referred to as “white collar” even though they do not require a CPA license, you might have believed that this means you are not eligible to receive overtime, especially if your job title contains words such as “senior,” “executive,” or “professional.” However, judging by recent developments, accountants everywhere would do well to re-examine the exact nature of their job duties to make sure that their employers have not misclassified them as being “exempt” from overtime compensation that have been rightfully earned.

Just a couple of years ago, two associate accountants in California filed a lawsuit seeking unpaid overtime against their former employer, Price Waterhouse Coopers, one of the largest accounting firms in the world. The accountants argued on behalf of themselves and other employees in similar situations that they were not exempt from overtime pay because they do not have a license as a Certified Public Accountant and their job duties do not allow them to exercise enough independent discretion for an exemption to be properly applied. The court in California thought the employees’ case had merit and certified the class action suit. Other suits against the “Big Four” major accounting firms soon followed.

What does “exemption” mean?

It is true that not everyone is eligible to overtime. Many so-called “white-collar” employees are not entitled to overtime compensation because they fit under one of the “exemptions” as defined by the FLSA (e.g., executive, administrative, professional, and outside sales). However, these exemptions should be considered as narrow exceptions to the general presumption that an employee is eligible for overtime. Because employers have much to gain by misclassifying an employee as being exempt, it might come as no surprise that they frequently do so, when they should in fact be paying their employees rightfully earned overtime.

Those who hold accounting and auditing positions without a CPA are most commonly misclassified under the professional and the administrative exemption. Those who hold a CPA license would properly fit under the professional exemption, because they have a specialized education and formal professional licensure. For those without a CPA, the analysis must go deeper.

Another important characteristic to both the professional and the administrative exemptions is the power and authority to exercise discretion in matters of significance. Your primary duties might be tasks that require independent judgment and creativity on a case-by-case basis, such as the following:

• Analyzing a customer’s information
• Determining which financial products best fit the customer’s needs
• Advising the customer, and devising strategies to market the employer’s products,

If that is the case, then you will most likely be ineligible to receive overtime compensation due to the administrative exemption being properly applied to you.

However, if you primarily perform tasks such as checking facts, entering data, or selling financial products, then you are unlikely to be exempt from overtime pay. The reason for this is that these tasks are mechanical, repetitive, and require you to follow pre-set rules and procedures. Exemptions are evaluated on a case-by-case basis. Being given the title of “senior” or “executive” accountant does not automatically make you ineligible to receive overtime compensation. The focus is on what you actually do, and not on your job title, income, or degree.

Our attorneys would also be happy to go over your situation with you and help you ascertain if you are owed overtime.

Don’t let your ego get in the way of claiming your overtime pay.

Sometimes, white-collar workers like you are reluctant to seek overtime pay because they “associate it with a labor pool that is valued for brawn rather than brains,” as Business Week writer Michael Orey suggests. Yet the U.S. Department of Labor estimated in 2008 that fully 86% of the U.S. labor force, or 115 million workers, are eligible to receive compensation for overtime hours worked. You could be one of them. The new attitude for workers like you should be, like one mid-level manager put it: “If a company wants my knowledge 24/7, they should have to pay for it, whenever they use it.”

What if my employer finds out about my lawsuit?

Employers cannot retaliate against you for taking action to protect your legal rights. Still, you shouldn’t have to go it alone. With your cooperation, an attorney experienced in labor and employment issues can help you better protect your rights.

What can I do now?

Every case is different, and no one can guarantee how much can be recovered in a given situation. Therefore it is important for you to contact Kennedy Hodges for a free consultation to find out if you should pursue your case as a lawsuit. The amount recoverable ultimately depends on many factors, such as the nature of your position and, of course, how many hours you work. Our attorneys are highly experienced in this area, as they have represented many workers like you. We welcome you to tell us about your case by calling our office at the number above or sending us an email for a free case review. We will help you know your rights, and we will help you protect your rights.

To read about an actual client we have represented please click here.

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