1. Amy classified the shift leaders for exempt status because some of their job functions fall within the criteria of an exempt employee. The criteria’s she based the exemption status on were their responsibilities and duties which enabled them to have a certain amount of authority and other factors led to the consideration for the exemption status. The nature of their duties as managers allowed them the ability to delegate and assign the employee to the various work areas. They were further classified because of their day to day responsibility that included running the floor, making limited managerial decisions, ability to sit in on potential prospect interviews, knowing first hand who is about to be terminated as well as providing feedback for associates performance review to the assistant managers. In addition to the managerial duties which were done for a small portion of the day, they had to assume the role of the associates by assisting customers and ringing up sales for the greater portion of the day.
Since the team leaders has some form of responsibilities as a manager Amy believes that she can appropriately classify them as exempt employees which qualifies for no overtime pay; she even reference the FLSA to Jane. By classifying the shift leaders as exempt allows for Amy to pay them a salary which is not clearly stated in the case. Also under the provisions of the FLSA if you are qualified as an exempt employee, you are not entitled to overtime pay. Lastly, the department store is benefiting greatly because upper management is able to get more than the regular 40 hours out of the employees with the benefit of not having to pay them time in a half or overtime for the extra hours worked which gives Amy leverage because she’s able to keep her personnel budget down.
2. The shift leaders are not properly classified as exempt employees. In order for consideration for an employee to be exempt the employer must take into consideration several factors. Those factors consist of the type of position that is held by an individual which are executives, administrative, learned professional, creative professional, computer workers and outside sales are qualifications for an employer to consider an exemption status for the employee which falls in line with FLSA. According to the case, none of these leaders fall into any of the above category. The pay is another element that must be taken into consideration.
Although the case does not stipulate how much the team leaders are getting paid, we know for sure that they are not paid nearly as much as the assistant manager however they are paid slightly higher than the associates. Another factor is that they are associates majority of the time with a small portion of time being allocated to managerial duties. To further advocate why they should not be exempt, is due to the needed approval from the assistant manager and or the store manager for sales returns that exceed $50.00 which eliminates them from making any significant judgment calls that is allowed by managers. Finally, the team leaders do not hire they only sit in on interviews, they do not make the daily schedule for associates only the assistant manager does, they don’t give appraisals however they do give input and they are not involved in managerial decisions. In order for managers to be considered exempt they would need to have complete autonym to decision making and the majority of their time should be spent on managerial duties instead of doing the work of an associate most of the time.
3. The things that Amy needs to consider before classifying shift leaders as exempt or non exempt employees are the requirements of the FLSA which consist of the salary base test. If the employee are being paid hourly than they are non-exempt and qualifies for overtime, if they are salary than they don’t qualify for overtime. The employee rate of pay, job position (Executive, Administrative, Professional (both learned and creative professionals), Computer professional and Outside sales, as well as a job analysis needs to be done in order to classify the employee as exempt or non exempt. Also the fair Pay Rules that was implemented in 2004 have guidelines for which compensation determines if the employee is deemed exempt.
If a careful analysis of manager’s duties was performed she would have been able to determine that they do not qualify as exempt employees; title alone can’t determine ones status. To expand things further her team leads were either quitting or complaining about not getting paid for all the extra hours worked so she should have consulted with HR to ensure that the proper status had been selected. In addition, she should have verified how many hours a exempt employee can work legally in excess of a 40 hour work week without getting compensated. Lastly other things she should have questioned before stipulating status; are the team leads getting medical insurance, paid vacation, sick pay and all the benefits that is associated with a full time position that is considered exempt.