Employers are under increasing stress as they reduce their workforces, furlough employees and wait to fill open positions until the economy improves. All those tactics might ease the short-term crunch now, but they may have far-reaching consequences down the line.
For example, employees whose job tasks have changed may now be wrongly classified as exempt from overtime under the Fair Labor Standards Act ( ). That’s a lawsuit waiting to happen, one that could quickly eat up any temporary savings you’re trying to achieve—especially if it turns into a class-action suit.
Recent case: Julio Baretto, a produce manager for a grocery store, was classified as exempt under the FLSA’s executive exemption. He met the first test in that he was paid a weekly salary greater than the FLSA threshold.
Less clear was whether he met the exemption’s other requirements: that his work consisted of primarily managing and regularly directing the work of two or more employees, being able to hire and fire or having his recommendations given “particular weight” by upper .
When he contested his FLSA classification in court, Baretto said the produce department was shorthanded. Therefore, he said, he was doing most of the work subordinates normally would have performed. That work kept him from devoting much time to the higher-level managerial tasks he was supposed to perform.
Baretto also claimed that because of staff cuts, he no longer managed two or more full-time employees. Finally, he testified that he didn’t interview or fire employees.
The 11th Circuit said it was an open question whether Baretto was exempt. It sent the case back to a trial court so a jury could hear the case. (Baretto v. Davie Marketplace, No. 08-16940, 11th Cir., 2009)
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