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Assistant Manager who Spends More than 50% Doing Non-exempt Work Now Classified as Non-exempt Employee


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By Max Nuyen

This case deals with the question of how an employee should be classified if they performed non-exempt and exempted work simultaneously.

What happens when an exempt employee does nonexempt work?
An assistant manager worked for a large national grocery chain.  The grocery chain had strict budgetary guidelines for its stores’ managers.  Each store was only allowed to have a certain number of staff members on duty at any time.  Any manager who could not meet the guidelines would face discipline, up to termination. The grocery chain also had customer service guidelines which required that a new checkout queue be opened anytime there are more than three customers in line.  Due to the staffing restrictions imposed by the budgetary guidelines, the salaried managerial employees would often have to spend a great deal of their time at the checkout stand ringing up customer purchases, or bagging groceries.

The assistant manager/employee in this case was affected by the grocery chain’s guidelines.  While she was an assistant manager and thus classified as exempt, she would often spend much of her workday doing non-exempt tasks such as checking out customers or bagging groceries.  More than fifty percent of her time was spent doing these tasks.  However, during the time that she was in the check-out stand, she would also do managerial tasks such as give directions to other employees, assessing the conditions of the store, and evaluating the performance of the staff.  Obvioulsy, multitasking was a constant part of her job.  

According to the evidence, it was not possible for a salaried manager to run the store without being required to do tasks that  other hourly workers did. When the assistant manager was not checking, bagging groceries, or stocking merchandise, she was responsible for the sales forecasts and budgeting. She was also responsible for the store’s 25-35 employees.  Additionally, she hired and trained staff, maintained employee files, disciplined employees, did wage performance paperwork, responded to management emails, prepared reports and schedules, did the bookkeeping, and conducted employee evaluations.  Her work schedule usually consisted of 10-12 hour days.

After the grocery chain discharged her, she sued for unpaid overtime wages.  Her main contention was that as a salaried employee who spent more than fifty percent of her time doing non exempt tasks, she should have been classified as non-exempt.

Is there such a thing as a hybrid employee?
The grocery chain countered by arguing that while the assistant manager performed hourly tasks, she also concurrently performed managerial tasks.  That is, she could still run the cash register and manage at the same time.  According to the grocery chain, so long as the assistant manager is still actively functioning in her managerial capacity, and addressing her attention to managerial tasks, such as observing how the store is run and considering how to make the store perform more efficient, how to best train the store’s employees , and how to resolve any employee or operational problems , all that time should be considered to fall under exempt status.

The court rejected the grocery chain’s argument and sided with the assistant manager.  The court found that the regulations do not recognize “hybrid” activities—i.e., activities that have both exempt and nonexempt aspects.  Rather, the regulations require that each discrete task be separately classified as either exempt or nonexempt.  Thus, the assistant manager was performing non-exempt work when she was on the cash register or bagging groceries.  Because she spent more than fifty percent of her time performing non-exempt tasks, it was improper for the grocery chain to have classified her as exempt.

Learning Point
The grocery chain learned the hard way the conundrum with “working managers.”  It is not uncommon for managerial staff in retail establishments to have to “pick up the slack” of hourly employees by doing non-exempt work.  However, if it gets to a point where the picking up the slack becomes the de facto job of the managerial employee, then that employer does not get the benefit of claiming exempt status of its assistant managers, and thus, overtime becomes applicable.

 

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