Fred Ball was an accountant in the finance department of the Little Italy Pasta Company and had been employed in that capacity for three years.

Exempt or Nonexempt

Fred Ball was an accountant in the finance department of the Little Italy Pasta Company and had been employed in that capacity for three years. Fred held a B.S.B. from Midwest State University and was enrolled in a Master of Accountancy program in a “weekend college” programat City University. Fred was paid $25 an hour for a 40-hour week. All company accountants were paid on an hourly basis, although the chiefaccountant was paid a monthly salary. Fred was also paid a premium of $50 a week for any new account that he was assigned. This premium was only paid for the first three months that he handled the new account because of the additional work required to set up and regularizethese accounts.

Fred had no set hours and worked his own schedule. He was allowed to work flexible hours, Monday through Saturday and was not required to submit a time card. No one was allowed to work on Sundays without the express permission of the plant owner and manager. Fred wasclassified as an exempt employee for overtime purposes.

Is Fred properly classified as an exempt employee?

What potential exposure does the company have under the Fair Labor Standards Act?

How might this exposure be reduced?