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Human Resources

example, in New York, the state has adopted its own salary Will these tests cover all parts of a
threshold for white collar employees (which became $37,830 ski area’s business?
on January 1), separate from the federal salary threshold Short answer: it depends. Certainly, both of these exemp-
that is currently set at $23,660 (Obama’s executive order is tions would exempt all on-mountain employees (ski school,
attempting to raise this threshold to $47,500). patrol, lift attendants, etc). These tests should also exempt
on-mountain food and beverage employees, as well as main-
How would these exemptions be enforced? tenance, security, events departments, internal HR and mar-
Typically, the issues of minimum wage and overtime rules keting teams, and so forth—assuming the employees are all
are enforced through audits from either state or federal labor working on site for the main ski area entity and not a sepa-
departments. An audit could be triggered by an employee com- rate corporate subsidiary.
plaint as well. Failure to comply with these laws, absent satis- However, the DOL has stated that, generally, hotel and
fying one of these two exemptions, could force an employer to lodging employees will not be exempt under these two tests.
pay back wages for the past three years, plus interest. From the DOL’s perspective, hotels and lodging have a differ-
More importantly, the overtime and minimum wage ent character than more traditional recreational aspects of the
laws under the FLSA can also be enforced by plaintiffs’ business. The DOL may decide to treat a ski area-owned hotel
attorneys who would seek to bring a class action suit for fail- as a separate “establishment” apart from ski area operations.
ure to pay minimum wage or overtime to a class of employ- According to the DOL Fieldbook that is used by department
ees. If a plaintiffs’ attorney prevails, in addition to back pay auditors, hotels and motels are “generally not within the cat-
and interest a business would also have to pay attorneys’ fees. egories of establishments which are commonly recognized as
In short, it pays to really understand these exemptions. inherently of an amusement or recreational nature.”

Are ski areas “seasonal recreation Do these exemptions apply to nonprofit
establishments”? or government-owned ski areas?
There is no doubt that ski areas satisfy the seasonality part Yes. There are approximately two dozen or so ski areas in
of these two exemptions, and clearly ski areas provide “rec- the US that are either owned by—or operate on land owned
reation.” There is existing case law from federal courts that by—state, county, or municipal governments, or by a non-
confirms that ski areas can easily satisfy the “seasonal recre- profit organization. Such ski areas can still qualify for the
ation” part of these two exemptions. seasonal recreation exemptions. For example, the DOL has
noted that employees of a municipal swimming pool facil-
Are only seasonal employees exempt? ity can qualify as a seasonal recreation establishment. (Note,

No, the statute and the DOL’s interpretation of the statute however, the DOL has emphasized that the rest of the city’s
confirm that the exemption covers “all” employees of the employees would not be exempt from minimum wage and
seasonal recreation establishment. Therefore, if a ski area overtime, because they are not part of the seasonal recreation
meets one or both of these tests, all employees—seasonal “establishment” that would only cover the employees of the
and year-round—would be exempt from minimum wage swimming pool facility.)
or overtime. Several courts have ruled that the seasonal
recreation exemptions “turn on the nature of the employer’s Which ski areas can satisfy the
activities, not on the type of work performed by individual seven-months operating test exemption?
employees.” For example, employees working in mainte- This exemption likely will apply to most of the smaller, mom-
nance or security positions would be exempt from over- and-pop ski areas that do not have substantial summer oper-
time and minimum wage, even though their jobs are not ations. Many ski areas that have embraced a multi-season
directly recreational in nature. operation will be less likely to satisfy this exemption. The
However, it is likely that these exemptions would not FLSA exempts seasonal recreational businesses that do not
cover those few employees who do not work directly at the operate for more than seven months in a calendar year. In other
ski area but work at an off-site central corporate office or words, a ski area that operates (i.e., is open for admission and
headquarters, such as when ski areas are part of a larger cor- generates revenues) in January, February, March, November,
porate structure of multiple ski areas. The exemption cov- and December but is closed to the public the rest of the mud
ers all employees at the “establishment,” which the DOL has season and summer is considered to be operating for five calen-
interpreted as pertaining to a distinct physical location. dar months, and thus would satisfy this exemption.

8 | NSAA JOURNAL | WINTER 2017