No one would ever accuse Lady Gaga of being boring. Case in point: her current legal woes, which make an excellent and entertaining cautionary tale for employers.
As is common practice in the entertainment world, Lady Gaga hired a friend to be her personal assistant (PA) at a relatively generous annual salary of $75,000. According to Lady Gaga, her PA: “slept in Egyptian cotton sheets every night, in five-star hotels, on private planes, eating caviar, partying … all night, wearing my clothes.”
After about a year, the two had a falling out, and Lady Gaga’s former PA filed a claim for almost $400,000 in unpaid overtime. Unable to keep her poker face, Lady Gaga’s reaction (under oath, in her deposition) was to call her former PA a “hood rat who is suing me for money she didn’t earn” and to declare that her former PA knew that she would be paid $75,000 for working “24/7” and that she knew that she wasn’t entitled to overtime.
Employees are entitled to overtime as a matter of law unless they fit within specific overtime exemption categories set forth in the Fair Labor Standard Act (FLSA) and, depending on the state in which the worker is employed, possibly under state law as well. For a personal assistant, the most plausible exemption is the administrative exemption.
According to the FLSA, in order to fall within this exemption, Lady Gaga would have to show that her former PA was paid on a salary basis of at least $455 per week, that her primary duty included performing office or non-manual work directly related to the management or general business operations of the employer or the employer’s customers, and that she exercised discretion and independent judgment with respect to matters of significance.
Although Lady Gaga paid her former PA a salary high enough to meet the requirements of the exemption, as is often the case, the nature of the PA’s duties is the sticking point. In the complaint and in her deposition, Lady Gaga’s former PA claimed that she spent her time reviewing and reconciling credit card statements, ordering meals, heating Lady Gaga’s food, packing and unpacking Lady Gaga’s 20 bags of luggage, “ensuring the promptness of a towel after a shower,” cleaning Lady Gaga’s hotel room (to which hotel staff were denied entrance), “serving as a personal alarm clock to keep Gaga on schedule,” helping Lady Gaga apply make-up and style her hair, and sleeping in Lady Gaga’s bed with her so that she would be able to attend to all her needs. If the PA’s description of her primary duties was accurate, she would be entitled to overtime for every hour she worked over 40 in a workweek. This is because the duties she described do not require the requisite level of discretion and independent judgment sufficient to meet the administrative overtime exemption.
That leads us, of course, to the second sticking point—how many hours of overtime did the PA work? When employing a non-exempt employee, it is the employer’s obligation to keep track of the hours the employee worked. According to the PA, she was hired to work “24/7” and she wasn’t compensated for 7,168 hours that she worked. But, it does not appear that anyone kept track of her hours.
Additionally, Lady Gaga’s PA claimed that even when she had time to herself during the day she was required to carry her cell phone in case Lady Gaga needed something. Whether a non-exempt employee is entitled to be paid during “standby time” requires a factual inquiry into the degree to which the employee is able to engage in personal activities. The relevant factors in that inquiry include whether the PA was expected to respond within a certain amount of time, whether the frequency of calls was significant, and whether she was restricted in geography. Similarly, if the PA really had to sleep in Lady Gaga’s bed to attend to any needs that might arise in the dark of night, that time would likely be compensable as well.
For those hiring a personal assistant—including those of us who do not need to avoid the “papa-paparazzi” but have an administrative employee—there are several lessons to be learned from Lady Gaga’s situation:
- Assume that the administrative employee will be paid by the hour, will not be salaried, and will be entitled to overtime, until you have analyzed the applicable overtime exemptions under federal and state law.
- If you think an employee’s duties fall within the administrative exemption, make sure to document what the employee’s expected duties are, and periodically review the employee’s actual duties performed to make sure that he or she remains within the administrative exemption throughout his or her employment.
- If the employee does not meet the criteria for an administrative exemption, maintain accurate records of the employee’s actual time worked and have clear expectations regarding when the employee is to be “on call.”