Our leisure industry, and golf and tennis particulary, is lumped dangerously in with every other industry and falls under federal legislation just like any other business in the USA.
Just as there are rules governing the independent contractor and whether the IRS will see an independent contractor as a club employee and fall under the tax umbrella, so are there also stipulations governing exempt vs non-exempt employees. These regulations only come into effect if your tennis professional is an employee of the club. Oftentimes, clubs and home owner associations make the error in creating an independent contractor position to avoid these pitfalls within the employment legislation.
To try and make complicated legislation simple for the purpose of this article, an exempt employee is not due overtime pay. A non-exempt employee is due overtime pay when over 40 hours in one week or holiday pay comes into effect. The legislation falls under the Fair Labor Standards Act and the act itself defines an exempt employee as such:
- The employee must be guaranteed a salary that equates to no less than $455
- The employee’s primary duty must consist of managing the business or a
customarily recognized department; and
- The employee must customarily and regularly direct the work of two or more
- The employee must have authority to hire or fire employees, or the employee’s
recommendations as to hiring, firing, or promotion of employees must be
given particular weight.
As you can see these points can be hazy given the position of a Director of Tennis, Head Tennis Professional or an Assistant Tennis Pro. An IRS fact sheet that can help any understanding of any exemption is located here: IRS Exempt Employee Fact Sheet
Almost on an annual basis, we hear of cases where tennis professionals have sued the club at which they work under the Fair Labor Standards Act. Each case is an employee by employee investigation as each case has its own characteristics and merits its own investigation.
Some of the points that have been raised previously by disgruntled tennis employees are as follows:
- Time that is spent with members or players before and after lessons count toward hourly pay. These hours are often claimed by employees and have stood up in court as the employee is working with members on club property and providing a “concierge” service.
- Less than 50% of time is spent managing other employees and programming. Most of the time of a head pro or assistant pro is spent on the court and therefore it is impossible for that employee to spend over 50% on managerial duties. In fact, any exempt employee must manage and be responsible for the hiring and firing of at least two full-time employees.
- A club has docked the assistant pro for missing an afternoon. This is an immediate hint to any examiner that the employee is in fact non-exempt. Docking pay is looked badly on by examiners and should not be part of an exempt employees package.
Examples abound. And there are many ways in which a club can get itself caught in the web of legislation and defending itself during a state payroll or IRS audit. An exempt employee is one who has several classifications and because of those administrative and professional classifications, can fall foul of the federal law. Tennis and golf professionals along with fitness trainers, and even caddies, often fall within the cracks of this legislation, both at the federal and state levels and clubs end up paying overtime in back pay in court.
Before any club or human resources department draws up a contract, the club and its governing bodies should fully understand the FLSA legislation and the background in the case law.