Exempt Classification for Recruiters in the Staffing Industry: What Courts Care About
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Staffing companies face increasing risk in connection with the use of exempt classifications, particularly in the context of recruiter classificaiton. While it is not impossible to properly classify recruiters as exempt, it does appear that courts are taking a stricter stance in recent years. What is clear is that an exempt classification is more likely to hold up in court where the evidence reflects that recruiters have meaningful independent judgment such as deciding which candidates to recommend, helping the client manage the temporary personnel, firing workers without prior approval, negotiating candidate contracts with clients, and participating in setting contract rates. Conversely, recruiters who primarily source and present candidates to fill job openings, but who must still comply with routine recruiting governed by rigid procedures, scripts, quotas, prescribed timelines, and required postings, with little or no authority to deviate without approval are unlikely to be deemed properly exempt.
Recently, in Thomas v. TEKsystems, Inc., 2026 WL 381239 (W.D. Pa. Feb. 11, 2026), a Pennsylvania district court found that recruiters were not exempt because they functioned more like salespeople where their primary duties did not relate to the general management of the business nor did they exercise discretion and independent judgment with respect to matters of significance.
The court found that the recruiters' duties were more akin to inside salespeople because their job revolved around the marketplace offerings of the employer. Specifically, the court relied on evidence of the day-to-day duties to find that recruiters primarily sourced and contacted potential candidates to offer inform them of the job offers that the company had available. The court held that the recruiters had a product to sell, the jobs available, and their duties consisted of trying to secure candidates for those placements. Additionally, the recruiters did not supervise anyone, did not do any of the actual contract negotiations with the client, and did not create or implement any management policies for the employer or the clients.
The court also found that recruiters did not exercise discretion and independent judgment in matters of significance because their job duties more closely resembled screening for minimum qualifications. The court relied on evidence showing that recruiters followed instructions over which they had no authority to create or implement, did not have authority to present candidates directly to a client nor otherwise communicate with clients, and did not have authority to negotiate pay rates and terms and conditions of employment outside of prescribed guidelines. Similarly, recruiters in theory had the ability to create their own recruiting tactics but ultimately were evaluated based on performance metrics set by the employer and coached or disciplined if they did not meet those metrics using the right recruiting tactics.
TEKsystems had a similar fate in California two years ago. The court in Avery v. TEKsystems, Inc., 2024 WL 4281442 (N.D. Cal. September 23, 2024) also found that TEKsystems failed to provide evidence that their recruiters were exempt. In so doing, it contrasted between the responsibilities of the recruiters and account managers. The court largely based its finding on the facts that recruiters found, screened, and negotiated pay within a prescribed range, but ultimately had to present candidates to account managers who made the decision whether to present the candidate to the client or not. The court compared the work of recruiters to that of inspectors who may make recommendations but only by evaluating facts against strictly prescribed standards, thus engaging in exercising skill rather than discretion and independent judgment.
It is important to remember that a job description that reflects exempt job duties and salary that meets the exempt requirements are the least relevant factors for a court when presented with a misclassification claim. These two factors should be viewed as the basics that an employer must comply with. By far, the most important and difficult factor is to ensure that the employee's day-to-day duties actually reflect work directly related to the general management of the business and that involve the exercise of discretion and independent judgment with respect to matters of significance.