Court greenlights productivity standards for exempt employees

Take great caution in tinkering with the job duties and requirements of an exempt employee. A miscalculation can result in the loss of exempt status and liability for unpaid overtime. For an employer who gambled and won, read on.

Gamble

Bayada Home Healthcare hires registered nurses who visit patients in their homes and provide healthcare-related services. They are exempt from overtime as professional employees.

The nurses are required to meet certain productivity minimums every week that are calculated based on performing certain tasks. By way of example, the visit to a home was allocated 1.33 hours. The hours were then placed into a paid time off (PTO) bank available for use while employed or in cash upon leaving employment.

If the employee dropped below a certain threshold of productivity hours in a given week, then the difference between what they were supposed to earn and what was actually earned was deducted from the hours in the bank. Employees were allowed to ask for a reduction of the weekly minimum.

Challenge

Bayada was hit with a class action lawsuit. The employees argued that a hallmark of exempt status—a set and guaranteed minimum salary every week—wasn’t satisfied. No set salary, no exemption.

Essentially, in exchange for not getting overtime, the employee is given a preset and guaranteed salary that isn’t reduced based on productivity and is given no matter how little the employee works in the week.

The employees made two arguments.