Many retail stores and restaurants routinely classify their store managers as exempt under the Fair Labor Standards Act’s () executive exemption, meaning they’re not eligible for overtime pay.
But an increasing number of those managers are filing FLSA lawsuits, claiming they should be classified as nonexempt, hourly employees—and, thus, due overtime—because they spend most of their time doing the same tasks as their subordinates.
But that’s not the test. In fact, managers often do double duty. As long as their “primary” duty is still, managers can still spend a good portion of their time working the floor.
Recent case: Dorothy Wilson, store manager at a Family Dollar franchise, was paid a salary of more than $600 per week, plus performance bonuses.
Wilson joined a class-action FLSA lawsuit against the chain, claiming she worked more than 70 hours per week and should receive overtime pay.
Reason: She mostly did manual labor, just like the hourly staff.
But Family Dollar showed that Wilson also 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 Wilson was exempt, saying the time spent on general labor isn’t the sole determining factor. Managers are expected to multitask—that is, to manage employees while also performing physical tasks. (Ward, et al., v. Family Dollar Stores, WD NC, 2011)
Final note: To be correctly labeled an exempt executive employee, a person must earn a salary of at least $455 per week, have management as his or her primary duty, regularly direct two or more employees and have the authority to hire and fire (or have higher-ups weigh their recommendations).
Online resource: For help determining an employee’s exemption status, download our free Exempt vs. Nonexempt checklist.
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