Is a Paralegal Exempt from Overtime?

Behind every successful lawyer is an overworked paralegal.  For those who do not know, paralegals are to the legal field what nurses are to the medical field.  Although they are (usually) not licensed to practice law like attorneys, they can assist in many aspects of legal work.  Some things paralegals are allowed to do on their own, some require direction or supervision from a lawyer, and some things can only be done by an attorney.  A person might think that, since paralegals work for lawyers or law firms, it’s safe to assume that they are paid properly under the law.  That person would be wrong.  Paralegals are often paid on a salary basis, and often that method of payment is not appropriate for paralegals.  The question we address today is this: are paralegals exempt from overtime pay?

First, we have to determine what we mean by “exempt.” Under the Fair Labor Standards Act, employees are entitled to at least minimum wage for all hours worked and one and one-half times their regular rate of pay for hours worked in excess of forty per week, unless there is a specific rule “exempting” an employee from these requirements.  Some “exemptions” are for both minimum wage AND overtime, meaning an employer does not have to pay minimum wage for all hours worked and also does not have to pay time-and-a-half for hours over forty per week, and some “exemptions” are only for overtime (but the employees are still entitled to at least minimum wage.)

Second, we have to address the difference between state and federal law.  The Fair Labor Standards Act is a federal law that address minimum wage and overtime requirements.  It covers most but not all employment situations.  There is also a Michigan law that addresses minimum wage and overtime requirements for Michigan employers.  Employees are always entitled to the greater protection available to them.  So, if an employee is covered by both Federal and Michigan law, but one requires that the employee receive a higher rate of pay, then the employee is entitled to that higher rate of pay.

Many employers of paralegals mistakenly rely on the “learned professional exemption” to justify paying their paralegals on a salary basis without paying them overtime. This exemption says that you do not have to pay minimum wage and overtime to an employee who is paid a salary of at least $455 per week AND whose primary duty is the performance of work requiring knowledge of an advanced type in a field of science or learning customarily acquired by a prolonged course of specialized intellectual instruction.  Regulations and cases on this exemption have gone on to give more detail and clarification about what this means.  Basically, to qualify for this exemption, you must be doing work that REQUIRES advanced knowledge, that knowledge must be in a recognized field of science or learning (like something you could major in at a regular college), and the knowledge must be something that is usually learned through a “prolonged course of specialized intellectual instruction” (such as getting a degree in the subject.) This educational component must be a standard prerequisite to entrance into the profession, meaning that people who want to do this job are expected to have this qualification.

Although many paralegals have degrees and/or certifications in paralegal studies, no such background is required to call yourself a “paralegal.”  This means that someone performing typical paralegal work, such as drafting documents, filing things with the Court, communicating with clients, organizing files, and conducting discovery does NOT fall under the professional exemption.  However, there are a lot of kinds of “paralegals.”  It is possible that a paralegal has an advanced degree in something else and regularly uses that background in their work.  For example, a law firm that handles a lot of cases dealing with manufacturing and products liability may hire someone with an engineering degree to provide expert advice or use their engineering knowledge.  This person may be labeled as a “paralegal,” but they are doing work that requires using the knowledge they gained from their advanced degree and can most likely qualify for the professional exemption.

There are other exemptions that may apply to people who are called “paralegals,” not because they are paralegals but because of other aspects of their job.  For example, if someone is called a “paralegal” but really acts more as an office manager, that person may fall under the “administrative exemption.”  This would require that the employee works in the management or business operation of the employer and can make important decision and exercise judgment.  Regular paralegal work would not meet these requirements, but some other non-attorney law firm jobs might.

If you are a paralegal or anyone else who believes you have been paid improperly, call Gold Star Law for help.