Dive Brief:

• Recruiters at Randstad Staffing are not entitled to overtime pay, the 6th U.S. Circuit Court of Appeals has ruled. Three recruiters sued, alleging that they were due unpaid overtime and damages because they didn't fall under the Fair Labor Standards Act's (FLSA) administrative exemption.
• The parties didn't dispute that three account managers met the first two prerequisites for overtime: they were paid at least $455 per week, and their primary duty was office or non-manual work directly related to the business. But the plaintiffs argued they were misclassified because the didn't meet the third requirement: "the exercise of discretion and independent judgment with respect to matters of significance."
• The court disagreed, and held that the recruiters' responsibilities, even though performed according to the employer's guidelines, required that they use discretion in matching candidates with appropriate employers based on their own subjective criteria.

Dive Insight:

The court's decision noted that employees who perform other related tasks might not be exempt, however. For example, "personnel clerks who ‘screen’ applicants to obtain data regarding their minimum qualifications and fitness for employment generally do not meet the duties requirements for the administrative exemption."

For recruiters to be properly classified under FLSA, they must exercise independent judgment and discretion, rendering them exempt from overtime pay. Staffing agencies may want to review their placement professionals' level of discretion and independent decision-making abilities to determine whether they are correctly classified.

The ruling, however, is largely good news for staffing agencies, particularly those who place temporary workers. Employers should note, however, that the salary threshold could soon increase, requiring further exemption reviews.