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Overtime Exemptions Are Narrow: A Primer For Family Employers

A convenience store chain will pay $8.3 million to a class of "store managers" who alleged they were improperly designated as exempt from overtime and thus were not properly paid for overtime hours worked.

The class representative said that he, for example, should not have been designated exempt as a "store manager" because he "did not have the authority to make personnel or independent decisions that would affect the business."

The employer paid the class representative $800 per week. He and other store managers had to work 16 hours or more of overtime per week.

More than 1,100 store managers across the country will receive part of the settlement. The employer changed its overtime policy when the lawsuit was filed in 2014. David Ferrara "Circle K settles overtime suit in Las Vegas for about $8.3M" reviewjournal.com (Jan. 03, 2019).

Commentary and Checklist

To be exempt, a staff member's job duties and salary must meet certain requirements outlined by the U.S. Department of Labor. As the above case shows, relying on job titles when classifying staff as exempt does not lead to legal compliance.

To learn more about the specific job duties that exempt certain staff from overtime, read the DOL's Fact Sheet #17A at https://www.dol.gov/whd/overtime/fs17a_overview.htm.

Closely-carved exemptions do exist. However, these exemptions do not apply to manual laborers, or "blue collar" workers, who perform work "involving repetitive operations with their hands, physical skill and energy." Examples of staff who are never exempt from federal overtime requirements include: gardeners, drivers, and maids.

While live-in domestic staff may be exempt from overtime pay under certain limited circumstances, other staff members who may be always on-duty are not. Employers must pay any non-exempt staff member minimum wage and overtime for all hours worked.

It is always wise to consult your legal counsel before treating a staff member as exempt from overtime or minimum wage requirements. Make sure to write accurate job descriptions that include primary duties for each staff position to help determine exempt or non-exempt status.

According to the DOL, types of staff who may be exempt from overtime pay include:
 

  • Executive, administrative, professional, and outside sales staff who make at least $47,476 per year or $913 per week;
  • Babysitters on a casual basis (also exempt from minimum wage requirements);
  • Companions for the elderly (also exempt from minimum wage requirements);
  • Live-in domestic staff;
  • Farm workers employed by small farms (also exempt from minimum wage requirements);
  • Highly-compensated, non-manual staff paid at least $134,004 annually who regular performs at least one of the duties of exempt executive, administrative, or professional staff.
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