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A light emerges as employers prepare for an increase in payroll expenses that will result from the Department of Labor’s Overtime Final Rule, the implementation of which has been delayed, but which will raise the salary threshold from $23,660 to $47,476. On December 19, 2016, a jury entered a verdict in favor of the restaurant employer finding that a middle manager is an ‘exempt employee’, despite performing manual labor as part of her day-to-day responsibilities. The action involved a claim for unpaid overtime under fair labor Standards Act, 29 U.S.C. Section 216(b) (“FLSA”) against the Burgerfi Weston location wherein Diana Downie, the location’s Assistant Manager, alleged that she performed non-exempt work, and thus should have been paid time and a half for all hours worked over forty in one week.
The FLSA requires that most employees in the United States be paid at least the federal minimum wage for all hours worked and overtime pay at time and one-half the regular rate of pay for all hours worked over 40 hours in a workweek.
However, Section 13(a)(1) of the FLSA provides an exemption from both minimum wage and overtime pay for employees employed as bona fide executive, administrative, professional and outside sales employees. To qualify for exemption, employees generally must meet certain tests regarding their job duties:
- The employee must be compensated on a salary basis (as defined in the regulations) at a rate not less than $913 (previously $455) per week;
- The employee’s primary duty must be managing the enterprise, or managing a customarily recognized department or subdivision of the enterprise;
- The employee must customarily and regularly direct the work of at least two or more other full-time employees or their equivalent; and
- The employee must have the authority to hire or fire other employees, or the employee’s suggestions and recommendations as to the hiring, firing, advancement, promotion or any other change of status of other employees must be given particular weight.
Downie brought the overtime wage claim against BurgerFi, alleging that the restaurant illegally failed to pay her overtime pay. The issue was whether the manual labor Downie performed as part of her regular responsibilities met the criteria for exemption of under the FLSA.
Downie’s employment satisfied all other elements of the test. But the parties disagreed on whether her primary duty was managing the enterprise. BurgerFi argued the overtime requirements of the FLSA did not apply too her because she served in a management capacity and was an exempt employee. Her primary duties were the performance of work requiring management of employees and staff, budgets, responsibility for financial success of the business as well as implementation of operational strategies. In addition, she scheduled the work hours of staff f and had input in the decisions regarding
Downie, on the other hand, argued that while her job title was Assistant Manager, her responsibilities, including cleaning, food preparation and customer service, were nonexempt in nature.
Ultimately, Jurors found for BurgerFi deciding that Downie’s employment was exempt from overtime pay despite her kitchen and cleaning duty responsibilities. This verdict offers some clarity to restaurant owners that often employ managers who must perform both administrative tasks and manual labor.
- Kristy E. Armada is a land use attorney at the Florida law firm of Olive Judd, P.A. Ms. Armada represents clients in a broad range of land use matters including site plan approvals, code enforcement matters, permitting, and examination of current and future entitlement rights.