FLSA Compliance for House Directors: Monitor Overtime with Caution and Care

Dianne Chipps Bailey & Susan Miller Huber, Robinson, Bradshaw & Hinson, PA, dbailey@rbh.com and shuber@rbh.com

Sorority and fraternity house directors typically live where they work, which makes wage and hour compliance exceptionally challenging.  The line between working and not working is hard to draw, and, when a dispute arises, it can be difficult for a local housing corporation to prove the number of hours a house director actually worked.  Clear job expectations and detailed recordkeeping are essential to successfully defend against a claim brought by a disgruntled house director.

To further complicate matters, some house directors may be exempt from the minimum wage or overtime pay provisions of the Fair Labor Standards Act (“FLSA”), but exemption determinations are fact-specific and the penalties for underpayment of wages can be severe, often including liquidated damages and attorneys’ fees that far exceed the original wage underpayment.   One common misconception is that all employees who are paid a salary are exempt; in fact, only employees who meet a certain salary threshold ($455 per week) and also have certain job duties that are executive, professional or administrative qualify for these salary-based exemptions.  Generalizations in this area of the law are difficult because the specific job duties of house directors vary widely from organization to organization and among different local housing corporations affiliated with the same organization.  Furthermore, the availability of the exemption may vary from year to year depending on the level of oversight by local volunteer leaders.

In recent years, the Department of Labor has increased its staff of investigators which, in turn, has allowed increased Wage and Hour Division scrutiny of employer compliance with the FLSA.  Local housing corporations that classify their house director employees as exempt (or would like to do so) should discuss the FLSA exemption status of their employees with legal counsel.  FLSA determinations must be made on a case-by-case basis and exempting employees from minimum wage and overtime pay is not without risk.

The most conservative approach is to treat house director employees as non-exempt under the FLSA and develop and adopt policies and best practices to ensure these employees work only 40 hours per workweek and are paid at least the applicable minimum wage (currently at least $7.25 per hour and higher under some states’ laws).

Best practices and policies for local housing corporations to eliminate or reduce overtime for house directors include:

• Developing and adopting a written wage and hour policy that is distributed to and signed by house directors upon hire.
• Keeping a signed copy of the wage and hour policy in the house director’s employee file.
• Establishing a weekly schedule for house directors that requires 40 or fewer hours of work per workweek.
• Agreeing to a certain amount of “off-the-clock” time for sleeping, meals, or purely personal pursuits inside or outside of the local chapter house.
• Requiring house directors to secure advance approval for all work in addition to or outside the weekly schedule, except in emergencies.
• Clearly communicating that all unscheduled work will be compensated, with or without pre-approval, but that failure to secure pre-approval may subject the house director to discipline.
• Requiring subsequent paperwork (i.e., an “exception report”) to record unscheduled work or overtime.
• Requiring house directors to accurately record all time worked and sign their time cards each week or pay period.

Mandatory recordkeeping under the FLSA includes indentifying information (full name, social security or other identifying number, address, birth date, sex and occupation) and pay stub information (time and day workweek begins, daily and weekly hours worked, rate and basis of pay, regular hourly pay rate, total daily and weekly “straight” earnings, total weekly overtime, additions or deductions from wages, total wages paid each pay period, and date of payment and pay period covered).  We recommend that you also keep a signed copy of the local housing corporation’s wage and hour policy and any records requesting or approving unscheduled or overtime work.  As discussed in the November 2011 issue of Fraternal Law, it also is a good idea to develop and implement a document retention policy.  The FLSA requires employers to maintain certain employee records for at least three years, but you may consider keeping wage-related records for seven years for tax purposes.

A robust wage and hour policy will help local housing corporations comply with the FLSA and help protect against employment litigation.