A federal court in Michigan federal ruled that Randstad’s account managers, assistant branch manager, and staffing consultants are administrative employees under the Fair Labor Standards Act and not entitled to overtime pay requested in a class action lawsuit.
During their employment with Randstad, Judith Perry, Erin Lane, and Aimee Dooling were classified as exempt, but they argued in the lawsuit they shouldn't have been, and were mis-classified.
A fourth plaintiff, Suhaima Choudhury, was classified as non-exempt, but claimed she was not informed of this or permitted to claim overtime hours. Choudhury contends she was initially offered a position as an exempt employee (Staffing Consultant), but that upon her arrival she was instead identified as a Talent Acquisition Specialist. Choudhury “assumed” the Talent Acquisition Specialist position was also salaried and exempt, and contends that she was not permitted to record overtime hours.
Their base pay ranged from $32,000 to $48,125 and they were also eligible for commissions and bonuses.
The staffing company argued that the four employees were covered by the administrative exemption to the FLSA’s overtime requirements.
To meet this exemption, the employee (1) must be compensated on a salary basis of at least $455 per week
(2) their primary duty is the performance of office or non-manual work directly related to the management or general business operations of the
employer or the employer’s customers
(3) their primary duty “includes the exercise of discretion and independent judgment with respect to matters of significance”
The plaintiff's argument
At the heart of the lawsuit on the plaintiffs' side is that their "discretion" was constrained and their independent judgment "micromanaged” due to Randstad’s Work Planning Index (“WPI”).
The WPI is a measure of an employee's productivity: it assigns a certain point value to various tasks. Plaintiffs claim that they were required to complete certain tasks to add up to a 100 points each week, and that it was “impossible” to complete the required 100 points during a standard 40-hour work week.
Previous staffing firm lawsuits
In rejecting that argument, the Michigan court said the WPI is a spreadsheet – it is a method for tracking the completion of tasks, but it does not dictate how the employee completes those tasks.
It also turned to a previous decision by the Department of Labor in a similar case involving a staffing company and the exempt classification.
"It appears that Staffing Managers who recruit; interview; hire and
recommend placement of employees to particular assignments; manage the client’s temporary labor pool; provide advice on personnel issues; handle complaints; resolve grievances; and terminate employees on behalf of the client’s management, exercise the requisite discretion and independent judgment with respect to matters of significance," read the DOL opinion from 2005.
More recently, there was another "discretionary power" opinion in favor of a staffing company in a 2010 lawsuit against Aerotek.
Although the recruiter “did not have the power to make ultimate employment decisions for Aerotek’s clients, the record shows that she exercised considerable discretion with regard to the selection of candidates to be sent to the client’s hiring manager for approval.”