In a recent decision, the United States Court of Appeals for the Second
Circuit ruled that entry-level accountants were "learned professionals"
and therefore exempt from the overtime provisions of the Fair Labor Standards Acts.
The issue for the court was whether junior employees at KPMG met the criteria
for being exempt from the FLSA's overtime requirements under the "learned
professional exemption" based on the following facts:
- they received substantial specialized education as accountants
- they were designated as accountants by their employer
- they performed entry-level accounting tasks
- they were automatically promoted to a more senior accounting position after
two years of satisfactory employment
Generally speaking, the professional exemption applies where "an employee's
primary duty must be the performance of work requiring advanced knowledge
in a field of science or learning customarily acquired by a prolonged
course of specialized intellectual instruction." The court found
that merely because the junior accountants were subject to supervision
by more experienced colleagues and were required to comply with certain
"formal guidelines" did not relegate them to the role of "non-professional
staff." The court emphasized that although the associates' "tasks
can be broken down into component parts, and that the junior accountants
are provided with step-by-step instructions for performing their functions
effectively does not mean that in performing these tasks audit associates
do not demonstrate the professional skepticism and trained intellect that
is required of professional accountants."
The court also rejected the associates' argument that however well-educated
they are, "their actual work does not call on whatever advanced knowledge
they have acquired in their course of study, but only on KPMG's own
materials and internal training." The court noted "that the
average classics or bio-chemistry major could not understand [KPMG's
training] materials, or develop the requisite understanding of the audit
function, on the basis of a brief training period."