call 24/7 | TOLL FREE | 1-888-449-2068

Bookkeepers and Clerks Eligible to Overtime

Just about every company has at least one person in charge of keeping their basic accounting books in order. Some use accounting software, others do it the old fashioned way with pencil and paper. Regardless of how the data is recorded, bookkeepers and others who perform that important function are usually not exempt from overtime pay. That is, the law requires their employers to pay them overtime.

Unfortunately, in many big companies with larger accounting offices, these bookkeepers and accounting clerks get pigeonholed into the administrative exemption. This misapplication of the exemption costs accounting personnel thousands of dollars every year.

Order your FREE copy of 10 Biggest Mistakes That Can Hurt Your Wage & Overtime Claim, written by the Texas wage and hour lawyers at Kennedy Hodges to help victims of wage and overtime violations.

Administrative exemption does not apply

Employers do not get the benefit of the administrative exemption, unless they can prove that all of the following tests are met:

1. The employee must be paid a salary (or a fee basis, which is defined by the regulations) at a rate not less than $455 per week;
2. The employee’s “primary duty” must be the performance of non-manual or office work directly related to the “management” or “general business operations” of the employer or the employer’s customers; and
3. The employee’s primary duty must include the exercise of independent judgment and discretion with respect to matters of significance.

“Primary Duty”

The phrase “primary duty” under the law means the principal, main, major or most important duty performed by the employee. This determination must be based on all the facts in each case, with the emphasis on the character of the employee’s job as a whole.

“Directly Related to Management or General Business Operations”

The phrase “directly related to management or general business operations” is one of the requirements that employers often cannot meet. To satisfy this component of the administrative exemption, the employer must show that the employee performed work directly related to assisting with the running or servicing of the business, as compared to, for example working on a assembly production line or selling a product in a service or retail establishment.

Work “directly related to management or general business operations” includes, but is not limited to, work in functional areas such as finance; tax; accounting; auditing; insurance; quality control; budgeting; legal and regulatory compliance; purchasing; advertising; marketing; research; safety and health; personnel management; government relations; human resources; procurement; employee benefits; labor relations; public relations; computer network, Internet and database administration; and similar activities.

Examples of jobs and activities that are not exempt

Bookkeepers essentially keep records of the day-to-day financial transactions of a business. But they typically do not exercise independent discretion and judgment in their job. Instead they must follow strict company rules. When they post details of transactions, compute interest charges, total accounts, monitor loans and accounts to ensure that payments are up to date; compute balances and reconcile billing vouchers, assure accuracy of data on accounts, etc., they are not exercising discretion. Instead they are performing a skilled task according to predetermined rules. Therefore, accounting clerks and bookkeepers are not exempt from overtime.

For example, we have represented clients who worked for companies that protest property taxes. These clients had to enter large volumes of data into spreadsheets, and perform calculations, monitor files, and perform other clerical work. First, they did not exercise independent discretion. Second, they were not involved with the general operation of the business, but instead performed the work that generated revenue for the company. Therefore, these “technical analysts,” as they were called, are not subject to the administrative exemption.

If you have any questions or think your job falls in a gray area, we would be happy to review your particular job duties. You may also request a copy of our free book on overtime claims.

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

---

Blog for Bookkeepers & Clerks

• Don’t let your employer deny you overtime if you're an administrative assistant