Management exemption looks at duties, not time — Business Management Daily: Free Reports on Human Resources, Employment Law, Office Management, Office Communication, Office Technology and Small Business Tax Business Management Daily

Retail managers are generally responsible for everything that happens in their stores—from hiring, firing and training employees to meeting profit goals. But they often spend most of their time doing the same work that hourly employees do, such as running cash registers. Even so, they may qualify as exempt employees under the Fair Labor Standards Act.

It’s the quality of the management work they do that counts, not the number of hours they spend doing it.

Recent case: Nancy Soehnle worked for a Hess convenience store as the site manager. Her responsibilities included supervising other employees, scheduling them and delegating work. She also recruited, hired and trained employees. She was responsible for the store’s overall profitability, maintenance and safety.

However, the reality of her workday was that Soehnle spent about 85% of her time running the register. She only spent about an hour a day on management duties.

Soehnle worked an average of 70 hours per week and earned an annual salary of $34,000. That was roughly twice as much as any of the employees she hired and supervised were paid. And because Hess classified her as an exempt employee, she received no overtime pay.

Soehnle sued, alleging she should have been paid overtime. She claimed that, because she spent so much time on the register, she wasn’t really a manager.

The court disagreed. It said that what counts is not the amount of time spent on management, but the quality of that time. In this case, her most critical duties were managerial, and she alone was responsible for those duties. (Soehnle v. Hess Corporation, No. 10-1344, 3rd Cir., 2010)

Final note: The outcome might have been different if Soehnle had fewer management duties or there were several other managers working with her.

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