The U.S. Department of Labor has recently determined that employees filling the role of “staffing managers”, and who possess and exercise significant decision-making power at staffing agencies, are exempt from overtime pay. The determination was noted in a DOL opinion paper in October and indicated that the “significant decision-making power” designation applied to those managers who recruit, assign, terminate and discipline employees. It further noted that such staffing managers are exempt administrative employees under the overtime pay exemptions that went into effect last year.

Overtime pay requirements are determined by the Fair Labor Standards Act. Employees are exempt from overtime pay if they must exercise “discretion and independent judgment with respect to matters or significance.” The DOL specifically interpreted this criterion within the context of the case, noting that “independent judgment” depends on the selectivity of the staffing manager in assigning employees to customers.

The DOL ultimately decided in favor of the staffing agency in the case after the firm represented to the DOL that the staffing managers’ duties include discussing personnel needs with clients, recruiting and interviewing potential candidates, negotiating fees, hiring employees and assigning employees. The managers were also paid at least $455 per week on a salary basis, another requirement under the administration exemption.

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