Two recent court cases in which former credit union employees claim theywere improperly classified begs the question: which credit unionpositions should be exempt?

The answer isn't an easy one, said attorney Dave Brewer, partnerat the Moore Brewer Wolfe Jones Tyler & North law firm in LaJolla, Calif.

“The CEO gets to be classified as exempt, and that's the onlyeasy answer,” he said.

The $151 million Emery FCU of Cincinnati was hit with a FairLabor Standards Act suit Jan. 11 after a loan officer claimed shewas improperly classified as exempt. The $4 billion PatelcoCredit Union of Pleasanton, Calif., is also facing a similarsuit in which plaintiffs claim it misclassified dozens of assistantbranch managers.

American Airlines FCU of Fort Worth, Texas paid nearly $83,000in back wages to nearly 300 current and former employees in 2011following a DOL investigation.

There are three basic exemption categories, Brewer said:professional, executive and administrative. Professional andexecutive are pretty straight forward, but the administrativecategory is full of gray areas, he said. Job titles, such asmarketing specialist or loan officer, don't determineclassification. The paramount issue in determining classification,Brewer said, is the amount of discretion the employee has inperforming day to day duties. “Basically, to be exempt, an employeehas to operate somewhat independently, without being directed eachhour on the job,” he said. Other factors Brewer listed include theability to hire and fire staff, and the ability to write or changeprocedures that effect the organization.

Authority supervising other staff is another litmus test. Breweroffered branch employees as an example. A teller is non-exempt, hesaid, because he or she would have no discretion regarding workduties each day. However, a head teller, who has some authorityover other tellers, could potentially be exempt.

Branch managers would be more likely to be classified as exempt,he said, because they have authority over employees and can writeand interpret policies, and make managerial decisions as part oftheir job.

Lynn Athens, vice president of human resources for theCalifornia and Nevada Credit Union Leagues, said determiningclassification for employees who don't have direct reports istricky.

“I'd look at other criteria, like control over a budget or theability to write policy for the organization,” she said.

On its website, the U.S. Department of Labor said that toqualify for the administrative exemption, employees must primarilyperform office work directly related to management or generalbusiness operations, and “exercise discretion and independentjudgment with respect to matters of significance.”

Athens said the size of a credit union also comes into play.

“If you're doing marketing for a credit union with only fouremployees, you're probably in charge of your own budget and settingpolicies everyone else has to follow, which could make you exempt,”she said, “whereas a marketing specialist in a credit union with afive-person marketing department would not.”

Other exempt categories include computer employees, which couldinclude IT staffers, and outside sales exemptions, which couldinclude business development officers.

Brewer said although the classification question isn't a newlegal issue, he thinks credit unions will see more lawsuits on thetopic, “especially when we're in a down economy where employees arelooking for any reason in the world, right or wrong, to increasetheir income.”

The $151 million Emery FCU of Cincinnati was hit with a FairLabor Standards Act suit Jan. 11 after a loan officer claimed shewas improperly classified as exempt. The $4 billion PatelcoCredit Union of Pleasanton, Calif., is also facing a similarsuit in which plaintiffs claim it misclassified dozens of assistantbranch managers.

American Airlines FCU of Fort Worth, Texas paid nearly $83,000in back wages to nearly 300 current and former employees in 2011following a DOL investigation.