University staff misclassified as exempt from overtime

Monday, May 5, 2003

COLUMBIA, Mo. -- The University of Missouri system is reviewing its overtime policy after a state audit suggested that some employees were mistakenly classified as exempt from mandatory overtime pay.

Overtime-exempt employees, who often work in management, get flat salaries. Federal law requires that nonexempt employees, who usually work in lower-level positions, are to receive overtime pay after 40 hours per week.

The financial effect of the suspected misclassifications is not known, because it is unclear how many -- if any -- employees worked unpaid overtime and whether they would seek back wages.

The university received the results of the audit from PricewaterhouseCoopers last July. It was among about 700 internal audits The Kansas City Star obtained last month to settle a long-running lawsuit.

The firm had sent electronic surveys to 120 employees asking about their job duties. Employees at all four campuses -- Columbia, Kansas City, St. Louis and Rolla -- were contacted.

Among the 65 who responded, 47 "appear to be misclassified as exempt," auditors wrote.

"Based on the survey responses, it appears a large number of employees are potentially misclassified as exempt," auditors wrote, adding that "additional work is necessary to determine if a real problem of classification exists and its extent."

Lack of consistency

Auditors found a lack of formal, consistent procedures at each campus to determine whether employees should be exempt. Auditors also said job titles and classifications were not reviewed on a periodic basis.

While exempt employees who worked overtime could seek back pay for the last two years, no one has made that request, said Ken Hutchinson, vice president of human resources for the university system.

"These issues did not come from employees. It was my initiative asking PricewaterhouseCoopers to look at this," Hutchinson said. "I think it merits further review, and that's what we are doing."

In all, the university system has 6,767 exempt employees, not counting faculty, but Hutchinson said the audit and his concerns focused on fewer than 600 people.

Hutchinson asked the auditors to study four job categories that he thought might be misclassified -- administrative associates, executive staff assistants and two groups of computer user and software support employees.

Hutchinson said the survey was helpful but reflected only people who responded and their understanding of the questions.

"I don't think this alone will be sufficient," Hutchinson said.

Hutchinson told auditors last summer that a staff committee formed to investigate the issue would report its findings and recommend a course of action by February.

But Hutchinson said other priorities have delayed the committee's work.

"Our plans are still to do that," he said.

Gail Lawrence, president of the Staff Advisory Council, representing several thousand employees, said she was unaware of the audit and had not heard people complain about being wrongly classified as exempt.

With the possibility of another round of state budget cuts for higher education looming, Lawrence said, university employees are more concerned about avoiding layoffs than about overtime pay.

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