A former personal assistant of Lady Gaga recently filed a lawsuit against the entertainer’s touring company claiming that she was improperly denied hundreds of thousands of dollars in overtime pay under both the Federal Fair Labor Standards Act (“FLSA”) and New York state law. O’Neill v. Mermaid Touring Inc., Civil Case No. 11-9128 (Southern District of New York, Dec. 14, 2011). In support of her allegations, the former assistant claims that her position did not qualify for the “administrative exception” to overtime laws because she did not exercise any significant independent discretion or judgment in her role while she, essentially, worked around the clock in exchange for a fixed salary. Although the assistant worked a mere 13 months for the pop star and was well-compensated for the position (pursuant to the complaint, she was initially paid $1,000 per week and, subsequently, an annual salary of $75,000), she claims that she was on call 24/7 to handle tasks that did not require any independent discretion or judgment and, accordingly, is seeking $380,000 in back overtime compensation for 7,168 overtime hours that she allegedly worked in the star’s home and while touring and traveling with her around the world.
Cases such as these tend to catch our attention either because of the large amounts of money sought and/or because of the celebrity involved, but often their significance to more typical employment relationships goes unnoticed.
Regardless of the ultimate merits (or lack thereof) or outcome of the lawsuit, the case illustrates two wage and hour issues that employers should be cognizant of: (1) the administrative exemption to overtime; and (2) the ways in which non-exempt, on-call employees should be compensated and/or treated.
Administrative Exemption to Overtime
Under the U.S. Department of Labor (“DOL”) regulations, an administrative assistant who is paid on a salaried basis and exercises significant independent discretion and judgment is exempt under the "administrative exemption." 29 CFR § 541.203(d). This exemption also applies to employees who exercise significant independent discretion and judgment in performing "office or non-manual" work. Challenges to the applicability of the exemption to executive or personal assistants are not uncommon. Although some courts have expressed reluctance to rule that well-compensated individuals providing such assistance do not exercise "discretion and independent judgment,” case law remains unclear.
Non-Exempt, On-Call Employment
This case also serves as a reminder that on-call employment must not unduly restrict a non-exempt employee’s ability to spend his or her time away from the job. The amount of restrictions imposed on a non-exempt, on-call employee’s time not at work will be considered in determining whether or not an employee should be compensated for on-call hours. For example, if required to remain on an employer’s premises or within such a close distance that prevents the employee from using his or her time effectively or freely, the employee may be eligible to receive overtime pay under wage and hour laws.
The Take Away
Compliance with wage and hour laws requires an understanding of what it means to be exempt or non-exempt from overtime obligations. Further, employers of non-exempt employees are often unaware that some requirements of the positions may trigger payment/overtime obligations. For example, if a non-exempt employee of a marketing group is required to attend networking events outside of normal working hours, such time must be paid. Similarly, a building superintendent who lives at the building and is required to be “on-call” at all times may have to be compensated for all such “on-call” time if he is not permitted to leave the building (or travel beyond a limited distance) while off-duty but on-call.
Relevant to this personal assistant’s case, employers and individuals who retain personal or executive assistants should be aware of the employment risks associated with such employment and the need to pay such employees on a salaried basis and ensure that the assistants utilize independent discretion and judgment in performing their job duties in order to qualify for the protections afforded by the administrative exemption to overtime payment obligations.