Did a Louisiana state agency owe overtime or compensatory time to its contracted executive director?

Plain-English summary

The New Orleans Center for Creative Arts/Riverfront board asked whether its contracted executive director was owed overtime or compensatory time. The board also asked about paying out accrued time each year and recovering money paid inappropriately. In Opinion 03-0004, the Louisiana Attorney General said the federal overtime rule exempted a bona fide executive and that no state law required overtime. He viewed an executive director as falling within that category, subject to the board's factual determination about the actual position.

The opinion cited a case involving an employer that both established a compensatory-leave policy and obligated itself by contract to pay overtime. Its answer here turned on whether an applicable policy existed for this director, a question of fact the AG would not decide. The board also had to determine whether the director in fact worked in an executive, administrative, or professional capacity. Because the other two questions depended on those facts, the opinion did not decide whether accrued time had to be paid annually or how any inappropriate payments should be recovered.

Currency note

This opinion was issued in 2003. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.

What the opinion meant at issuance

State agency boards

The AG identified the federal executive exemption and said no state law required overtime in the circumstances he addressed. He left the director's actual classification and the existence of any applicable overtime or compensatory-time policy to the board's factual review.

Contracted public employees

The opinion cited a case in which an employer had both a compensatory-leave policy and a contractual overtime obligation for an otherwise exempt employee. It did not find that this board had adopted an applicable policy for its director.

Officials reviewing payouts or recovery of funds

The opinion did not answer the annual payout or recovery questions. It said those questions depended on the unresolved factual issue about the director's compensation rights.

Common questions

Q: Did the AG say this executive director was automatically owed overtime? A: No. The AG said the federal rule exempted bona fide executives and that no state law required overtime. He left the actual duties and any agency policy for the board to determine.

Q: Could an overtime-exempt employee still have a right to compensatory time? A: The opinion cited a case involving both a compensatory-leave policy and a contract to pay overtime. Here, the AG left the existence of an applicable policy to the board's factual determination.

Q: Did the opinion require the agency to cash out unused compensatory time every year? A: It did not answer that question. The AG said the remaining questions depended on factual findings about the director's classification and the board's overtime policy.

Q: Did the AG prescribe a way to recover allegedly improper payments? A: No. Recovery was among the questions the AG left unanswered because the underlying entitlement had not been established.

Background and statutory framework

The center's board had contracted with an executive director to manage daily operations. The opinion identified the center as a state agency within the Department of Education and cited R.S. 17:1970.21 et seq. It quoted the federal overtime requirement in 29 USC 207(a)(1) and the executive, administrative, and professional exemption in 29 U.S.C. 213(a)(1). The official PDF is served at number 03-0004, while its printed heading shortens that to 03-04; the issue date appears as APR 0 1 2003 in the extract.

Citations and references

Authorities in the opinion: R.S. 17:1970.21 et seq. (the center); 29 USC 207(a)(1) (federal overtime rule); 29 U.S.C. 213(a)(1) (exemption). The opinion also discussed court decisions on applying the exemption and on employer policies; some names and citations are garbled in the PDF extraction and are not restated here.

Source

• Landing page: https://www.ag.state.la.us/Opinions
• Original PDF: https://www.ag.state.la.us/Opinion/Download/03-0004

Original opinion text

Best-effort transcription from a scanned PDF. Minor errors may remain — the linked PDF is authoritative.

DEPARTMENT OF JUSTICE
c,v,L o,v,s,oN
P.O. Box 94005
TEL.: (504) 342-7013
BATON ROUGE
FAX: (504) 342-2090
RICHARD P. IEYOUB
70804-900,5
ATTORNEY GENERAL

APR 0 1 2003
OPINION 03-04
58 - LABOR LAWS
29 USC 213

An Executive Director would fall in the to exemption that overtime wage does not apply to en employee
Mr. Ernest G. Chachere, President
in a *bona fide executive, administrative
or professional capacity" unless a polic~
New Orleans Center for Creative
altowing overtime pay was in place for
Arts/Riverfront
the employee which is a factual
938 Franklin
determination.

Gretna, LA 70053

Dear Mr. Chachere:

This office is in receipt of your request for an opinion of the Attorney General in regard to compensation and benefits for the Executive Director of New Orleans Center for Creative Arts/Riverfront (NOCCAJRiverfront). You indicate NOCCA/Riverfront was established July 1, 2000 by R.S. 17:1970.21 et seq. It is an agency of the State contained in the Department of Education and governed and managed by an independent Board of Directors. Pursuant to its powers the Board has employed an Executive Director by a contract dated July 1, 2000, and amended contract on June 21,2002, and again on August 22, 2002, and second contract dated October 1, 2002. By contract the Director is given the responsibility of daily management of NOCCA/Riverfront under the supervision of the Board, and sets out certain compensation and other benefits for the Executive Director.

Issues have arisen as to whether the Executive Director is granted certain compensation and benefits by operation of law although these items are not provided for in the contracts.
After a review of the documents and state statutes, rules and regulations, the attorney for the board has concluded that the Executive Director would be a nonclassified employee, and as such would not be entitled to overtime or compensatory time unless such benefits were provided for in the contracts.

Accordingly, your inquiry is relative to the requirement for compensatory time and overtime for the Executive Director.

You further state that there are ancillary issues upon which you request guidance arising from the issue of compensatory and overtime payments. You set forth the following questions:

Mr. Ernest G. Chachere
OPINION 03-04
Page 2

1. Is a state agency required to pay overtime or grant compensatory time to an exempt, nonclassified employee under contract with the governing board of that agency to perform certain services for a specific contract amount?

2. Is a state agency required or permitted to pay out accrued compensatory time on an annual basis?

3. VVhat does Louisiana law require or permit as measure to recover funds of the state agency inappropriately paid to an employee of that agency or to otherwise address the inappropriate receipt of compensation and benefits?

We find the observations in Rutlin v. Prime Succession, Inc., 220 F.3d 737 (6th Cir 2000) pertinent wherein it stated as follows:

The FLSA requires an employer to compensate an employee who works over forty hours a week =at a rate of not less than one and one-half times the regular rate at which he is employed." 29 USC 207(a)(1). There is an exemption from the overtime pay requirement, however, for those employed in a ’bona fide executive, administrative, or professional capacity." See 29 U.S.C. 213(a)(1). This exemption is =narrowly construed against the employers seeking to assert [it]. Dou_~las, 113 F.3rd at 70 * * * The employer bears the burden of proving that an employee fits into the exemption. The determination of whether a plaintiff is professional is =intensely fact bound and case s.oecific." Bohn v. Park City_ Grou.o. Ins., 94 F.3d 1475, 1461 (10th Cir. 1996). (Emphasis added.)

In Atty. Gen. Qp. 00-503 this office stated it has recognized 29 USC 210 has certain exemptions to qvertime compensation which include =bona fide executive, administrative, or professions! capacity", but noted the courts have stated the decision whether an employee is exempt is primarily a question of fact. However, in Knecht, et al v. Board of Trustees, 591 So. 2d 690 (La 1991) the court found an employer may be required to give compensatory time for overtime to an employee otherwise exempted from FLSA coverage when the employer has established a policy that allows for compensatory leave, and has obligated itself to payment of overtime by its contract of employment.

As stated above, 29 U.S.C. 213(a)(1) provides that the provisions for minimum wage and maximum hours shall not apply to =any employee employed in a bona fide executive, administrative, or professional capacity’. It is our opinion that an Executive Director would clearly fall into this category and, thus, be exempt from the overtime pay requirements of the FLSA unless a policy allowing overtime pay was in place and applicable to the employee.

Mr. Ernest G. Chachere
OPINION 03-04
Page 3

However, whether a policy has been established providing for compensatory time far executives is a factual determination, and not a legal conclusion. This office has a policy that it will not seek out the facts nor issue an opinion on questions of facts.

There is no state law requiring the payment of overtime, and we cannot be of assistance in resolving the factual issue whether compensation for overtime for the Executive Director has been the policy. Your remaining questions are based upon the conclusion on this factual issue. The board must make the factual determination as to whether the Executive Director is in fact employed in an executive, administrative or professional capacity, and whether there is a policy in place concerning overtime pay.

We hope this sufficiently explains the position of this office.

Very truly yours,

RICHARD P. IEYOUB
A’I-i’ORN EY GENERAL

BARBARA B. RUTLEDGE
Assistant Attorney General

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