General labor doesn’t make manager nonexempt — Business Management Daily: Free Reports on Human Resources, Employment Law, Office Management, Office Communication, Office Technology and Small Business Tax Business Management Daily

General labor doesn’t make manager nonexempt

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in Human Resources,Overtime Labor Laws

Exempt employees don’t have to be paid overtime when they work in excess of 40 hours per week. Many retail and restaurant establishments routinely classify store man­agers as exempt under the Fair Labor Standards Act’s (FLSA) executive exemption. Every year, hundreds of those managers sue, claiming they should be classified as nonexempt because they spend almost all their time doing the same kinds of tasks their subordinates do.

But that’s not the test. In fact, managers often do double duty, performing manual tasks while also managing their workers.

Recent case: Dorothy Wilson started working for Family Dollar as a cashier and was quickly promoted to store manager. She was then paid a salary of more than $600 per week, plus performance bonuses when the store did well.

Wilson joined a class-action FLSA suit against the retail chain, claiming she worked more than 70 hours per week, mostly doing manual labor, and should receive overtime pay.

But Family Dollar showed that Wilson regularly supervised two employees, ordered merchandise, trained subordinates, set schedules, made recommendations on raises and even terminated an employee without having to get prior approval.

The court ruled that Wilson was exempt. It reasoned that the time spent on general labor alone isn’t the determining factor. Man­agers are expected to multitask—that is, to manage em­ployees while also performing physical tasks. Her case was dismissed. (Ward, et al., v. Family Dollar Stores, No. 3:08-MD 1932, WD NC, 2011)

Final note: Exempt executive employees must earn a salary of at least $455 per week, have as the primary duty management, customarily and regularly direct the work of two or more em­­ployees and have the authority to hire and fire employees (or have higher-ups carefully weigh their recommendations).

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