HR420 Unit 5 Wage and Hour Review Example

Same Title, Different Answer: A Unit 5 Wage and Hour Review of Two Salaried Managers

[Student Name]

Purdue University Global

HR420: Workplace Law, Labor Relations, and HR Risk Management

Unit 5 Wage and Hour Review

[Instructor Name]

[Date]

Wapsi Valley Car Wash, its staff and every figure are composite and illustrative; the regulations and case cited are real, and the review covers federal law only.

The Question

Wapsi Valley Car Wash pays its night closing managers and its detail shop managers a salary and does not pay them overtime. Both titles appear as managers on the chart. The question is whether each job meets the executive exemption under the Fair Labor Standards Act regulations.

The Task Log

For fourteen shifts, each manager logged tasks in quarter hours.

Night closing manager, Cedar Rapids North. About 80 percent of each shift was spent running the pay lane, guiding cars onto the conveyor, answering phones and closing the registers. About 15 percent went to directing the one attendant on shift and checking the tunnel at close. About 5 percent went to the closing report. Average shift: ten hours, five shifts a week. Salary: $850 a week.

Detail shop manager, Iowa City. About a third of the time was spent detailing cars on short-staffed days. The rest went to scheduling, inspecting finished cars, training new detailers and handling discipline for nine full-time detailers. She interviewed and recommended every detailer hired in the last year, and the general manager followed every recommendation. Salary: $960 a week.

The Elements in Order

The executive exemption requires all four of the following (General Rule for Executive Employees, 2024).

Salary basis and level. A predetermined salary not reduced for the quality or quantity of work, at or above the level currently enforced, $684 a week. Both managers pass.

Primary duty of management. Management of the business, or of a recognized department or subdivision within it, must be the employee's main job.

Customarily and regularly directing two or more full-time employees or their equivalent. That means at least eighty hours of subordinate work a week.

Authority to hire or fire, or recommendations given particular weight.

The Detail Shop Manager

Primary duty. The detail shop is a recognized department with its own staff, revenue and schedule. Although she spends about a third of her time detailing, an exempt executive may perform non-exempt work at the same time as management, as long as she remains responsible for the department while doing so (Concurrent Duties, 2024). She schedules, inspects and decides while she works. Her primary duty is management.

Directing two or more. Nine full-time detailers, about 360 hours of subordinate work a week. She passes easily.

Hiring weight. Her recommendations have been followed every time. She passes.

Conclusion. The detail shop manager meets the exemption.

The Night Closing Manager

Primary duty. Four-fifths of his shift is the same work the cashiers and attendants do. Running the pay lane is not managing it. His primary duty is arguably non-exempt work.

Directing two or more. He directs one attendant. Even if every hour of that attendant's ten-hour shift counts, five shifts give about fifty hours, short of the eighty required. He fails this element outright.

Hiring weight. He has never been asked for a hiring recommendation.

Conclusion. The night closing manager does not meet the exemption. Failing the headcount element alone is enough.

A manager title on an organization chart is not an exemption; the exemption is earned task by task, and the night closing manager's tasks are the cashier's.

Reading the Exemption Fairly

The Supreme Court has said that exemptions under the Act are to be given a fair reading, not a narrow one (Encino Motorcars, LLC v. Navarro, 2018). A fair reading does not save the night closing manager, because the failure is factual: one subordinate is not two.

The Overtime Exposure

Each night closing manager works about fifty hours a week. If the position is misclassified, the company owes overtime for about ten hours a week. The amount depends on how back pay is calculated.

Half-time method. Treating the $850 salary as covering all fifty hours gives a regular rate of $17. Half-time on ten hours is $85 a week, or about $8,840 per manager over two years.

Full premium on a forty-hour rate. Treating the salary as covering forty hours gives a regular rate of $21.25. Time and a half on ten hours is about $319 a week, or about $33,150 per manager over two years.

With nine night closing managers, the exposure ranges from about $80,000 to about $298,000 over two years, before any liquidated damages, which can double the amount, and longer recovery periods for willful violations.

Why the Two Jobs Drifted Apart

The two titles were created at the same time, when the chain opened its fourth site and wanted a manager on every shift. The detail shop grew into a real department with nine detailers and its own revenue. The night closing role did not grow: evening volume is light, so the company staffs one attendant and expects the manager to fill in everywhere else. The title stayed the same while the job became a cashier's job with keys. Reviews like this one should be repeated whenever staffing at a site changes, because the exemption can be lost without anyone changing a job description.

Recommendation

Reclassify the night closing manager position as non-exempt from the next pay period, with hourly pay set so that expected weekly earnings at fifty hours do not fall. Track hours from that date. Consult employment counsel on whether to calculate and pay back wages voluntarily. Keep the detail shop manager exempt, and document her duties and hiring recommendations annually.

References

Concurrent Duties, 29 C.F.R. § 541.106 (2024).

Encino Motorcars, LLC v. Navarro, 584 U.S. 79 (2018).

General Rule for Executive Employees, 29 C.F.R. § 541.100 (2024).