Is Santa Claus entitled to overtime?
Ho, ho, ho! Santa Claus is coming- to court!
Okay, Santa Claus is not really coming to court. But, hypothetically, if he did, would Santa Claus be entitled to overtime pay for hours worked in excess of forty per week?
The Fair Labor Standards Act (FLSA) entitles most employees in the United States to minimum wage for all hours worked and time-and-a-half for hours worked in excess of forty per week, with several exceptions called “exemptions.” Some exemptions mean that an employee is still entitled to minimum wage but not overtime, and some mean that an employee is not entitled to minimum wage or overtime. If an employer can establish that an employee meets all required elements of an exemption, then the employer can legally not pay the employee an overtime premium (and, in some cases, minimum wage.) Today we will address a few exemptions that may apply to Santa Claus and whether he would be entitled to minimum wage and overtime. As Santa mythology may vary, some assumptions have to be made.
The first issue, of course, is jurisdiction. The FLSA is a Untied States federal law. Different countries have different laws, and it is not known what employment laws, if any, govern the North Pole. Let’s assume some Christmas magic has taken place that subjects the North Pole to FLSA jurisdiction.
One exemption that may apply to Santa Claus is the executive exemption. The executive exemption is mainly used for managerial and supervisory employees. If an employee qualifies for this exemption, they are not entitled to minimum wage or an overtime premium under the FLSA. To qualify for the executive exemption, all of the following criteria must be met:
-The employee must be compensated on a salary basis of at least $455 per week (this amount is scheduled to increase to $684 per week on January 1, 2020);
-The employee’s primary duty must be managing the business, or managing a recognized department of the business;
-The employee must customarily and regularly direct the work of at least two or more other full-time employees or their equivalent; and
-The employee must have the authority to hire or fire other employees, or the employee’s suggestions and recommendations with respect to hiring, firing, or other employment status changes for other employees must be given great weight.
We do not know what, if anything, Santa Claus is paid. The other three criteria mainly depend on what is understood to be Santa Claus’s role at the North Pole. Is his primary duty managing the North Pole, or are there elves who handle the managerial aspects? Does Santa direct the work of the elves or other North Pole employees? Can he hire, fire, promote, or discipline elves or other employees? If Santa oversees all toy production and ultimately directs the work and employment status of the elves, he most likely satisfies these requirements. However, if he is not involved in elven supervision or management, but instead spends his time deciding who is naughty or nice and what toys, if any, children are to receive, there is another exemption that may apply…
The administrative exemption is intended for upper-level executives. Like the executive exemption, an employee who qualifies for this exemption is not entitled to minimum wage or overtime. To qualify, all of the following criteria must be met:
-The employee must be compensated on a salary basis of at least $455 per week (this amount is scheduled to increase to $684 per week on January 1, 2020);
-The employee’s primary duty must be the performance of office or non-manual work directly related to the management or general business operations of the employer or the employer’s customers; and
-The employee’s primary duty includes the exercise of discretion and independent judgment with respect to matters of significance.
Again, since we do not know what Santa is paid, we do not know if the first qualification is met. Beyond that, we need to make some assumptions about Santa’s work and the amount of discretion he has. If the elves are the ones actually making the toys, and Santa himself is not primarily engaged in manual labor, we can assume he performs office or non-manual work. It is also likely that his work directly relates to the management or general business operations of the North Pole. Finally, we can assume that his work involves the exercise of discretion and independent judgment with respect to matters of significance if we assume he has a decent amount of decision-making authority. Personally, I am not aware of any authority above Santa Claus who would limit his exercise of discretion. Determining whether a child has been good or bad is certainly a matter of significance in my household, and other decisions Santa may make about how the North Pole operates would also satisfy this element of the administrative exemption.
There are other exemptions that could be considered when determining whether Santa is entitled to overtime. One exemption that may be considered, but probably does not apply, is the seasonal exemption. Employees who work for “amusement or recreational establishments” that do not operate for more than seven months in any calendar year (or whose average receipts for any six months were less than 1/3rd of its total receipts for the prior year) are exempt from the minimum wage and overtime requirements. There are two reasons this exemption most likely does not apply to Santa. The first is that the North Pole is not an “amusement or recreational establishment.” Theme parks, golf courses, and water parks are “amusement or recreational establishments.” Although there may be North Pole-inspired places that are amusement or recreational establishments, such as Santa-themed establishments that families can visit around the holidays, the North Pole itself is not open to the public for recreational purposes. The second reason this exemption fails is that the North Pole does not satisfy the “seasonal” requirement of the FLSA. Santa’s voyage may only happen once a year, but presumably he works year-round to make it happen. Additionally, we know nothing about the North Pole’s income (if, indeed, it has any income at all.) Neither Santa Claus nor the elves are likely to fall under the seasonal exemption to the FLSA.
One more exemption that should be considered with respect to Santa Claus it the motor carrier exemption. Employees are exempt from the overtime requirements of the FLSA under the motor carrier exemption if the following requirements are met:
-The employee is employed by a “motor carrier” or “motor private carrier,” meaning a company in the business of providing motor vehicle transportation for compensation OR companies transporting their own property for sale, lease, rent, or other commercial enterprise; and
-The employee is a driver, driver’s helper, loader, or mechanic whose duties affect the safety of operations of motor vehicles in transportation on public highways in interstate or foreign commerce; and
-The vehicle is not covered by the small vehicle exception.
It is our professional legal opinion that Santa Claus does not fall under the motor carrier exemption. The first element is likely not satisfied because, despite Christmas being highly commercialized, I am not aware of Santa himself being engaged in commercial enterprise. Since he does not work for a transportation company and the goods he is transporting are not being sold or otherwise part of commerce, this disqualifies him from the exemption. The second element is also not met because 1) driving the sleigh once per year is, proportionally, a very small part of Santa’s job; 2) the sleigh is powered by reindeer, not motors, and is thus not a motor vehicle; and 3) the sleigh flies and thus does not use public highways and is not engaged in commerce.
In summary, the exemptions that would most likely apply to Santa Claus are the executive and administrative exemptions. He would not qualify for the seasonal or motor carrier exemptions, but qualifying for either the executive or administrative exemption would mean he is not entitled to minimum wage or overtime.
Merry Christmas from Gold Star Law!
