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Exempt or nonexempt? Forget 50% rule for store managers who must multitask

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in Human Resources,Overtime Labor Laws

Good news for employers that list store managers as exempt even though they spend 50% or more of their time engaging in mundane tasks like stocking, running registers and assisting customers. Managers may be multitasking but that doesn’t mean they’re nonexempt.

Recent case: Chelsie works as a manager for a Family Dollar store and joined a collective action against the retailer, claiming she was improperly classified as an exempt executive employee under the Fair Labor Standards Act.

Chelsie claimed to spend 80% to 90% of her time performing such mundane, nonexempt work as stocking merchandise, interacting with customers and running the register. Using the traditional 50% test for exempt-versus-nonexempt work, she argued that she was clearly entitled to overtime pay for some of the 55 hours per week she averaged.

But Family Dollar argued that Chelsie had to multitask—otherwise she would not be able to manage her 80 employees, prepare financial reports, hire and fire employees and manage the labor budget. Plus, it argued, she earned $950 per week, while her subordinates made just a little over minimum wage. In addition, Chelsie worked without direct supervision and had wide discretion about whom to hire, schedule and fire.

The court agreed with Family Dollar that Chelsie was exempt under the executive exemption, even if more than 50% of her time was spent on nonmanagerial tasks. (Grace, et al., v. Family Dollar Stores, No. 3:08-MD-1932, ED NC, 2012)

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