The Answer: It depends on the facts and circumstances of each case.
However, two recent reissued opinion letters from the United States Department of Labor’s Wage and Hour Division (WHD) provide construction companies with guidance regarding the issue of whether project superintendents and project supervisors are exempt administrative employees under the Fair Labor Standards Act (FLSA).
To be considered an exempt administrative employee, an individual must be paid on a salary basis, as defined by federal regulations, and must satisfy a duties test. To satisfy the duties test, the individual’s primary duty must be “the performance of office or non-manual work directly related to the management or general business operations of the employer or the employer’s customers.” 29 C.F.R. § 541.200(a). The individual must also exercise discretion and independent judgment regarding matters of significance. Id.
In FLSA2018-4, the WHD determined that a commercial construction company’s project superintendents satisfied the duties test as exempt administrative employees. The WHD concluded that the primary duty of a project superintendent related directly to the company’s business, namely being responsible for overseeing a construction project from beginning to end. The WHD also found that the project superintendents exercised discretion and independent judgment with respect to matters of significance, including hiring subcontractors, involvement in change orders, and overseeing the work of subcontractors.
Similarly, in FLSA2018-10, the WHD concluded that project supervisors of residential homebuilding companies met the duties test of an exempt administrative employee where they supervised and coordinated the construction of a home and dealt with subcontractors, suppliers, customers and inspectors on the worksite. Among their duties, the project supervisors directed, managed, scheduled, and paid subcontractors and suppliers; reviewed and modified new home plans; ensured compliance with all safety, quality, and legal requirements; ensured each home is ready for inspection; negotiated solutions to any issues on the project; and reviewed and tracked the project budget. The WHD also found that the project supervisors exercised discretion and independent judgment by adjusting construction process as necessary; negotiating solutions to issues raised during construction; scheduling subcontractors or suppliers; ordering the removal of employees or dismissal of subcontractors; and issuing payments or stopping payments.
While these two opinion letters provide some useful guidance, construction companies should remember that the WHD’s opinions are based on the facts and circumstances presented in each case and may be subject to challenge. The specific facts and duties of job classification will control whether a similar position is exempt from the FLSA. Furthermore, the WHD only interprets the FLSA and construction companies must still comply with local and state overtime laws. Construction companies should consult with an attorney to determine if their employees are properly classified as exempt for overtime purposes.