Assistant College Coaches: Are they Exempt from Overtime?

All employers- including institutions of higher education- must ensure that their employees are properly classified as either exempt or non-exempt. Failure to properly classify employees carries damages of back-pay, liquidated damages, court costs and attorneys fees- not to mention a public relations nightmare.

This blog focuses on the exempt status of assistant athletic coaches at institutions of higher education. As explained below, it is not a bright line rule that assistant college coaches are exempt. Institutions must evaluate each coach for each athletic program and establish whether that individual’s job is in fact exempt. If the coach’s position is not deemed exempt, then the institution must rectify the situation in accordance with the law and re-classify the employee.

CURRENT STATE OF AFFAIRS OF ASSISTANT COACHE’S SALARIES

Currently, most assistant coaches are paid on a salary basis and are not receiving overtime pay. These coaches are deemed “exempt.” We will explore what exactly “exempt” means further below. The U.S. Department of Education provides an annual reports on the salaries of college coaches. Below are few examples of the salaries of assistant coaches from 2020.

As seen above, some of these salaries are just over the minimum exempt salary threshold under the FLSA. It is crucial for universities to accurately classify these coaches, since the job of an assistant coach often requires increased hours, especially in-season.

FAIR LABOR STANDARDS ACT OVERVIEW

The Fair Labor Standards Act (FLSA) and the related regulations define what types of employees are exempt from overtime. Briefly, there are seven (7) possible exemptions. Out of those 7, it is fairly clear that the assistant coaches do not qualify under Computer, Outside Sales or Commissioned Sales exemptions. Below is a high-level overview of the possible avenues of exemption: (1) Executive, (2) Administrative and (3) Professional.

EXECUTIVE

  • These individuals are compensated with a salary that is at least $684 per week. (NOTE: Some states have a higher weekly threshold.)

  • Their primary duty is the management of the enterprise in which the employee is employed of a customarily recognized department or subdivision thereof.

  • Customarily and regularly directs the work of 2 or more employees; and

  • Has authority to hire or fire other employees or whose suggestion and recommendations as to hiring, firing, advancement, promotion or any other change of status of other employees are given particular weight.

  • NOTE: Management includes, but is not limited to: (1) interviewing, (2) selecting and training employees, (3) setting and adjusting employee rates of pay and hours, (4) directing the work of other employees, (5) maintaining production or sales records for use and supervision or control, (6) appraising employee efficiency/production for the purpose of recommending promotions or other changes in status, (7) evaluating employee complaints/grievances, (8) disciplining employees, (9) determining techniques, (10) apportioning work among employees, (11) control of the budget, and (12) assess legal compliance.

  • BOTTOM LINE FOR ASSISTANT COACHES: This depends on the program. However, most assistant coaches do not carry management duties.

    PROFESSIONAL

    • In order to qualify under the Professional exemption, the individual must be paid a salary at a minimum of $684 per week. (NOTE: Some states have a higher weekly threshold.)

    • Their position requires knowledge of an advanced type in a field of science or learning customarily acquired by a prolonged course of specialized intellectual instruction. The federal regulations identify law, theology or medicine as examples of jobs with such specific education. They specify that these professions have academic training that is a standard prerequisite for entrance into the profession.

    • The position requires invention, imagination, originality or talent in a creative field.

    • BOTTOM LINE FOR ASSISTANT COACHES. Assistant coaches most likely to do not qualify for the Professional Exemption.

      • What about a TEACHER EXEMPTION? The federal regulations exclude teachers from the minimum salary threshold and overtime. With that being said, the Department of Labor shed some insight as to whether a college coach could be deemed a “teacher” and thereby exempt. Here is what they had to say:

        Athletic coaches employed by higher education institutions may qualify for the teacher exemption. After all, teaching may include instructing student-athletes in how to perform their sport. But a coach will not qualify for the exemption if [their] primary duties are recruiting students to play sports or visiting high school and athletic camps to conduct interviews. the amount of time the coach spends instructing student-athletes in a team sport is relevant, but not the exclusive factor in determining the coach’s exempt status.

        BOTTOM LINE FOR ASSISTANT COLLEGE COACHES: Most likely, an assistant college coach will not qualify under the Teacher Exemption. Prudent Institutions of Higher Education will conduct an audit reviewing the duties of the assistant coach.

    ADMINISTRATIVE

    The Administrative Exemption seems to be where Higher Education Institutions classify assistant coaches. Colleges and Universities must ensure that their assistant coaches are in fact exempt under the Administrative Exemption. Let’s take a look to see what exactly the exemption entails:

    • An employee under the Administrative Exemption is one who is compensated on a salary or fee basis at $684 per week. (AGAIN NOTE: Some states have a higher minimum payment threshold.)

    • Their Primary Duty is the performance of office or non-manual work directly related to the management or general business operation of the employer or the employer’s customers.

    • This Primary Duty includes the exercise of discretion and independent judgment with respect to matters of significance.

    Let’s delve a bit deeper as it relates to the definitions:

    • Primary Duty: The phrase “primary duty” means the principal, main, major or most important duty that the employee performs. When making the primary duty determination, the following factors are considered:

      • Relative importance of the exempt duties;

      • the amount of time spent performing the exempt work;

      • the employee’s relative freedom from direct supervision;

      • the relationship between the employee’s salary and the wages paid to other employees for the kind of nonexempt work performed by the employee.

    • Directly Related to Management or General Business Operations: In order for an individual to qualify under the Administrative Exemption, the individual must perform work, “directly relating to assisting with running or servicing of the business…” The regulations provide a non-exhaustive list of examples of such work. (ie- work in: tax, finance, accounting, budget, audit, quality control, purchasing, procurement, advertising, marketing, research, safety and health, personnel management, human resources, employee benefit, labor relations, public relations, government relations, computer networking, internet database administration, and legal and regulatory compliance.)

      BOTTOM LINE: As the law provides, the individual’s primary duty (defined above) must be work directly related to management or general business operations. Institutions must assess each assistant coach’s duties and evaluate whether they in fact have responsibilities relating to the management/general business operations as defined above. Depending on the program, these coaches may not have such responsibilities.

    • Exercise Discretion or Independent Judgment. As explained above, the law also requires that administrative employees’ primary duty includes the exercise of discretion or independent judgment (“DIJ”) as it relates to matters of significance. DIJ involves the comparison and evaluation of possible courses of conduct, and acting or making a decision after the various possibilities have been considered.

      The significance of the matter, “refers to the level of importance or consequence of the work performed.”

      The Regulations provide examples of factors to consider when evaluating if an individual exercises such judgment. The factors include whether the employee:

      • has authority to formulate, affect, interpret or implement management policies or operating practices;

      • carries out major assignments in conducting the operations of the business;

      • performs work that affects business operations to a certain degree;

      • has authority to commit the employer in matters that have significant financial impact;

      • has authority to waive or deviate from established policies and procedures without prior approval;

      • has authority to negotiate and bind the company to significant matters;

      • provides consultation or expert advice to management;

      • is involved in planning long or short term business objectives;

      • investigates and resolves matter of significance on behalf of management;

      • represents the company in handling complaints, arbitration disputes or resolve grievances.

        NOTE: The regulations specify that DIJ does not mean that the employee’s decisions must have finality and unlimited authority without review. The fact that the employee’s decision is subject to review and may be revised or reversed on occasion, does not negate the DIJ.

      BOTTOM LINE: Universities and Colleges must sit down and review whether each assistant coach’s primary duty (defined above) involves DIJ.

      COMPARISON TO ASSISTANT MANAGERS: The regulations provide a helpful analogy and it is one that Universities and Colleges must give attention. The example reads as follows:

      …[A]ssistant managers in a retail establishment who perform exempt executive work such as supervising and directing the work of other employees, ordering merchandise, managing the budget and authorizing payment of bills may have management as their primary duty even if the assistant managers spend more than 50% of their time performing nonexempt work such as running the cash register. However, if such assistant managers are closely supervised and earn little more than the nonexempt employees, the assistant managers generally would not satisfy the primary duty requirement.

      It follows that even if the college coach performs some exempt work, if they are being closely monitored and supervised by thee head coach, AND they make a little more (if not the same) as other nonexempt employees, then there is an argument that they do not qualify for the exemption and are owed overtime. When evaluating the classification of the assistant coaches, institutions should also compare the salaries of the assistant coaches with those of the non-exempt employees of the institution.

TIPS FOR UNIVERSITIES AND COLLEGES

  • Initial Evaluation. Evaluation of the coach’s duties may reveal that the individual is not in fact exempt and is owed overtime.

  • Revise Job Descriptions. Prudent institutions will review the job descriptions of the coach’s and ensure that they accurately reflect the position. If a coach’s position is exempt, then it would be beneficial to tweak the job descriptions and job postings to utilize the language from the regulations relating to primary duty, DIJ, and duties directly related to the management and general business operations. It goes without being said, that if a coach’s position in not in fact exempt, then the institution must immediately commence tracking time and paying overtime.

  • Consider Higher Compensation. Institutions that desire to avoid exposure to wage and hour claims, can consider raising the compensation of these coaches. If an employee is considered to be a Highly Compensated Employee, then the that is a “strong indicator of an employee’s exempt status.” According to the federal regulations, when an employee is highly compensated, it eliminates “the need for a detailed analysis of the employee’s job duties.” Under this exemption, the employee must “customarily and regularly perform any one of the exempt duties or responsibilities.” Highly compensated employees do not need to meet all of the duty requirements mentioned above- they just need to conduct any one of the duties described above.

    In order to be considered “highly compensated” the employee must earn $107,432. Increasing compensation is a viable option to many institutions. Assistant coaches eligible for overtime may end up earning upwards of $100k with base and overtime. Increasing compensation will eliminate exposure to wage and hour liability and attract and retain qualified employees.

Susie Cirilli