Opinion ID: 2639132
Heading Depth: 1
Heading Rank: 6

Heading: compensation arrangement

Text: Petitioners argue that they do not fall within the professional employee exemption because the compensation arrangement under which they are paid by Respondents is not compensation on a salary basis. Respondents contend their part-time instructors are professionals compensated on a salary basis and therefore exempt from the overtime compensation requirements of the MWA. The Court of Appeals classified Petitioners, part-time community college instructors, as professionals compensated on a salary basis. Employees are paid on a salary basis when, weekly or less frequently, they receive a predetermined amount which is not subject to reduction regardless of the quality or quantity of work. [41] The Court of Appeals reasoned that: All of the faculty members [part-time instructors] in this case are generally compensated according to the same calculation: the number of credits or contact hours for the class to be taught multiplied by a bargained-for rate. Faculty members are paid at regular intervals during the academic quarter in equal or near-equal installments regardless of how many days or hours they work in each pay period.[ [42] ] Petitioners argue that they are hourly employees because the college salary schedules for part-time faculty indicate compensation based upon an hourly rate and the schedules for full-time faculty indicate compensation on an annual salary basis. Petitioners also contend the colleges' use of contact hours to calculate salary schedules is indicative of the part-time faculty members' status as hourly employees. A brief amici curiae was filed by the Washington State Labor Council and Washington Education Association arguing in support of Petitioners' claims that basing the instructors' pay on the number of contact hours makes the instructors hourly employees. The Court of Appeals, citing our opinion in Drinkwitz, determined that the MWA is not violated by calculating `exempt' employees' compensation using an hourly rate .... [43] In this case, under each quarterly contact, the colleges calculated a predetermined amount by multiplying the number of contact hours, which correspond to the applicable academic credits for a particular course, by the monetary amount specified in the collective bargaining agreements. The instructors were then paid this calculated amount in equal installments at regular intervals during the quarter, regardless of the actual number of instruction days or hours worked in each month of the quarter. Petitioners were guaranteed this calculated amount. Respondents' method of payment is therefore consistent with a salary basis rate of pay. [44] Petitioners also contend that the fluctuation in compensation from quarter to quarter demonstrates part-time instructors are paid hourly according to the number of contact hours for each class in each quarter. Relying on a United States District Court case, In re Wal-Mart Stores, Inc. Fair Labor Standards Act Litigation, [45] Petitioners argue that setting salaries before each quarter is an attempt by the colleges to avoid application of the MWA. The Court of Appeals correctly determined that Wal-Mart is distinguishable from this case. Besides, a District Court decision would be of questionable authority at any rate. In this case the colleges contracted with the part-time instructors on a quarterly basis, depending on the courses offered at each college. The Court of Appeals was correct in determining that part-time employment and the academic calendar dictated the need to contract with teachers on a quarterly basis and it did not constitute an effort to avoid the MWA.