When school districts hire individuals as coaches who are already serving as employees of those districts, concerns regarding the payment of such employees often arise. Because of those concerns, many school districts avoid such dual-employment relationships unless the coaches also serve as teachers. This Legal Update provides information related to the general requirements of the Fair Labor Standards Act (FLSA) and how those requirements apply to the compensation of coaches whether they are nonexempt or exempt employees.
Under the FLSA, an employee performing two (2) distinct functions for the employer may only be classified as nonexempt or exempt. Nonexempt employees are entitled to be paid at least $7.25 per hour and be paid at least one and one-half (1.5) times the employee’s regular hourly rate for work performed in excess of forty (40) hours per workweek. 29 U.S.C. §§ 206(a), 207(a). In a dual-employment circumstance, an employee’s combined hours would count toward the forty (40) hour threshold for overtime pay. Thus, unless an exemption applies under the FLSA, if that employee’s combined hours exceed forty (40) hours in a single workweek, the employee would be entitled to overtime pay.
The FLSA, its implementing regulations, and U.S. Department of Labor interpretive guidance provide an exemption for several types of employees employed in school districts, including for teachers; academic administrative employees; and employees serving in a bona fide executive, administrative, or professional capacity. See 29 C.F.R. § 541.300; 29 C.F.R. § 541.204; 29 U.S.C. § 213(a)(1).
To qualify for the bona fide executive, administrative, or professional capacity exemption, the employees must generally meet three (3) separate requirements: (1) the minimum salary requirement (29 C.F.R. § 541.604), (2) the salary basis requirement (29 C.F.R. § 541.602), and (3) the primary duty requirement (29 C.F.R. § 541.700).
In order to meet the minimum salary requirement, employees must be paid at least $684 per week (or $35,568 annually).
In order to meet the salary basis requirement, employees must receive a predetermined amount of compensation each pay period on a weekly, or less frequent basis, which cannot be subject to reduction because of variations in the quality or quantity of work performed. Thus, even when an employee is absent for a number of days or hours during the week, the employer cannot deduct from the employee’s salary if the employee actually worked within the workweek. Additionally, an employee is not paid on a salary basis if deductions from the employee’s predetermined compensation are made for absences occasioned by the employer or operating requirements of the business.
Finally, in order to meet the primary duty requirement, an employee’s “primary duty” must be the performance of exempt work. The term “primary duty” refers to the principal, main, major, or most important duty that the employee performs. Relevant factors to consider in determining whether the employee’s primary duty is exempt work include, but are not limited to, the relative importance of the exempt duties by comparison with other duties; the time spent performing exempt work; the employee’s relative freedom from direct supervision; and the relationship between the employee’s salary and the wages paid to other employees for the kind of nonexempt work performed by the employee. Generally speaking, when employees spend more than half of their time performing exempt work, they will satisfy the primary duty requirement. Nonetheless, time alone should not be the only factor considered.
In order to qualify for the administrative exemption, the employee must be paid on a salary or fee basis at the minimum salary requirement, and the employee’s primary duty must be performing 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. Additionally, the employee’s primary duty must include exercising discretion and independent judgment with respect to matters of significance. For school districts, administrative or executive assistants may qualify for the administrative exemption “if such employee[s], without specific instructions or prescribed procedures, ha[ve] been delegated authority regarding matters of significance.” 29 C.F.R. § 541.203(d). However, school districts should be cautious in applying the administrative exemption to all employees with the term “administrative” in their job titles.
In order to qualify for the executive exemption, the employee must be paid on a salary basis at the minimum salary requirement, and the employee’s primary duty must be managing the enterprise, or managing a customarily recognized department or subdivision of the enterprise. 29 C.F.R. § 541.100. Additionally, the employee must customarily and regularly direct the work of at least two (2) or more other employees. Finally, the employee must have the authority to hire or fire other employees, or be given particular consideration when the employee suggests and recommends the hiring, firing, advancement, promotion, or other change of status for other employees. For school districts, a maintenance supervisor may qualify for the executive exemption if that employee’s primary duty involves managing others and the employee’s suggestions/recommendations regarding the aforementioned employment actions are given particular consideration.
In order to qualify for the professional exemption, the employee must be paid on a salary or fee basis at the minimum salary requirement, and the employee’s primary duty must include the performance of work that requires knowledge of an advanced type in a field of science or learning customarily acquired by a prolonged course of specialized intellectual instruction, or that requires invention, imagination, originality, or talent in a recognized field of artistic or creative endeavor. 29 C.F.R. § 541.300. For school districts, licensed guidance counselors, licensed social workers, licensed registered nurses, speech therapists, and certified athletic trainers often qualify under the professional exemption.
In order to qualify for the academic administrative employee exemption, the employee must be paid on a salary or fee basis at the minimum salary requirement or on a salary basis at least equal to the entrance salary for teachers, and the employee’s primary duty must be performing administrative functions directly related to academic instruction. 29 C.F.R. § 541.204. For school districts, district administrators, principals, assistant principals, and directors often qualify under the academic administrative employee exemption.
In order to qualify for the teaching exemption, a teacher’s primary duty must be teaching, tutoring, instructing, or lecturing in the activity in which they are imparting knowledge, and they must be engaged and employed in the activity in an educational establishment (i.e., an elementary or secondary school system). 29 C.F.R. § 541.303(a). Teachers are not subject to the minimum salary or salary basis requirements. 29 C.F.R. § 541.303(d). Exempt teachers include, but are not limited to: regular academic teachers; teachers of kindergarten or nursery school pupils; teachers of gifted or disabled children; teachers of skilled and semi-skilled trades and occupations; teachers engaged in automobile driving instruction; aircraft flight instructors; home economics teachers; and vocal or instrumental music instructors. 29 C.F.R. § 541.303(b).
The FLSA regulations specifically recognize that teachers who also serve as coaches are not required to receive overtime pay for their time spent coaching. Id. Nonetheless, questions arise when coaches are not also employed as teachers.
In 2018, the Department of Labor (DOL) issued an Opinion Letter considering whether coaches qualify for the teaching exemption if those coaches are community members. The DOL advised that when a coach’s primary duty is teaching, the coach would qualify for the teaching exemption irrespective of holding a teaching certification or an academic degree. In such a case, the coach would not be entitled to overtime pay.
However, when a coach’s primary role with a school district is a nonexempt position (i.e., a support staff position), the DOL Opinion Letter suggests that the primary duty requirement would be unaffected by the individual’s coaching duties. Thus, school districts must engage in the analysis as to whether one of the aforementioned exemptions apply to the coach. When a coach is considered an exempt employee who is not entitled to overtime pay, school districts may pay that coach as they deem appropriate. However, if none of the exemptions apply, the school district would be responsible for providing the individual overtime pay for any hours the individual worked in excess of forty (40) hours per workweek, including time spent on coaching responsibilities.
Because support staff members typically receive a higher rate of pay than a coach, school districts are likely to have questions concerning the employee’s overtime rate of pay. In such circumstances, school districts are encouraged to consult legal counsel who can assist in assessing a legally permissible rate of pay and help in drafting a dual-employment contract for the employee, as well as establishing procedures to track actual time spent in performance of coaching duties.
 The prohibition against deductions from pay is subject to certain exceptions that are beyond the scope of this Legal Update.
 An employee paid on a fee basis may be paid an agreed sum for a single job regardless of the time required for completion. 29 C.F.R. 541.605(a).
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