Family Dollar owes big bucks to misclassified managers — Business Management Daily: Free Reports on Human Resources, Employment Law, Office Management, Office Communication, Office Technology and Small Business Tax Business Management Daily
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Family Dollar owes big bucks to misclassified managers

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in Human Resources

Family Dollar Stores recently got a lesson in the nuances of overtime labor law. The 11th Circuit Court of Appeals, which covers Florida, has upheld the $35.6 million settlement of a class action suit brought by store managers at the discount chain.

Family Dollar paid its managers as exempt personnel. But managers had no authority to hire or fire personnel and spent many of their hours performing manual labor such as stocking shelves and unloading trucks.

The retailer maintained it considered the managers executives and therefore exempt. The court looked at the managers’ responsibilities and the actual work they did and determined they were not exempt from the Fair Labor Standards Act (FLSA).

Titles mean little when determining whether an employee is exempt or nonexempt. Courts look at actual practices. A manager who can’t hire and fire is probably eligible for overtime.

Final note:
The EEOC apparently doesn’t understand the federal overtime law either. A federal arbiter recently ruled that the EEOC’s policy of requiring some workers to accept comp time in lieu of overtime pay does not meet the FLSA’s requirements. If the government can’t get it right, what are employers supposed to do?

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