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Retail/Mgmt Exempt?

In short: Does retail fall in exempt status, and can they deduct hours if employee takes personal time off but averages over 40 per week? Background: We are trying to figure out if someone hired to manage a retail store is exempt or not. Looking over the exempt requirements is vague where retail is concerned. Employees only have HS diploma and there is no additional education needed for the job. The salary being paid is just over the $455 minimum weekly requirement. When hired, person was never told the number of hours per week required, but works 62 hours per week, sometimes more, thus salary they are paying reverts to below minimum wage. Company also deducted 2 days from salary when employee took off (for personal reasons and employer informed in advance) even though employee worked well over 40 hours for that week. Employee evens comes in on what has been scheduled as a day off (shipment arrived).

The federal Fair Labor Standards Act (FLSA) establishes minimum wage, overtime pay, recordkeeping, and youth employment standards affecting employees in the private sector and in Federal, State, and local governments.

Under the FLSA, employees are classified as either non-exempt or exempt.

Hourly and salary paid are compensation terms.

Non-exempt employees must be paid for all hours worked and are subject to overtime and minimum wage requirements prescribed by the FLSA. Most employees are considered non-exempt.

Conversely, exempt employees receive a fixed predetermined salary for any week during which work is performed regardless of the quantity or quality of such work. Exempt employees are excluded from overtime pay provisions.

It’s up to employers to determine an employee’s classification based on FLSA guidelines.

To be exempt, an employee must pass all three “tests”, salary level, salary basis, and duties, as outlined by the FLSA.

The salary level test: Employees who are paid less than $455 per week ($913 per week as of December 1, 2016) are non-exempt.

The salary basis test: An exempt employee must receive a regular, predetermined amount of compensation each pay period on a weekly, or less frequent, basis. Aside from a few exceptions, an employee must receive the full salary for any workweek during which the employee performs any work, regardless of the number of days or hours worked.

The duties test: An employee who meets the salary level and salary basis tests is exempt only if he/she also performs exempt job duties. The actual tasks of the job are to be evaluated, not the job title. There are three typical categories of exempt job duties titled executive, professional, and administrative.

Job duties are exempt “executive” job duties if the employee regularly supervises two or more other employees, has management as the primary duty of the position, and has some genuine input into the job status of other employees (such as hiring, firing, promotions, or assignments).

“Professionally” exempt work is predominantly intellectual, requires specialized education, and involves the exercise of discretion and judgment. Advanced degrees are the most common measure of this but are not absolutely necessary if an employee has attained a similar level of advanced education through other means and performs essentially the same kind of work as similar employees who do have advanced degrees.

“Administratively” exempt employees provide support to the operational or production employees and have a major impact on the overall business. An administratively exempt employee has the authority to create or interpret company policies, has responsibilities that directly relate to the overall business operation, has the decision making ability to make significant financial impacts, and has the authority to deviate from company policy without prior approval.

An employee who doesn’t pass all three tests is considered non-exempt under the FLSA.

It’s often assumed that a Retail Manager automatically falls under the executive exemption. However, if the Manager’s primary duty is not actually management the exemption doesn’t apply. Factors to consider when determining the primary duty of an employee include, but are not limited to, the relative importance of the exempt duties as compared with other types of duties; the amount of time spent performing exempt work; the employee’s relative freedom from direct supervision; and the relationship between the employee’s salary and the wages paid to other employees for the kind of nonexempt work performed by the employee. If the Manager is not performing exempt/management duties the majority of the workday/week then the position should be classified as non-exempt. For example, if the Manager is continually left alone and is expected to perform menial tasks for significant amounts of time then the criteria for executive exemption are not met.

Also, remember, come December 1st the employee will have to earn at least $913 per week to meet the salary level requirement. Otherwise, the classification must be changed to non-exempt.


October 18th, 2016, 2:21 PM |  Posted in: Compensation, Labor Laws |
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Drinking Water

Is an employer obligated to provide drinking water and disposables in the break room?

The federal Occupational Safety and Health Administration (OSHA) ensures safe and healthful working conditions in the workplace through training and regulations.

OSHA requires potable water to be provided in all places of employment in amounts that are adequate to meet the health and personal needs of each employee. Potable water means water that is safe from toxins and meets the standard for drinking purposes set forth by state and/or municipality regulations.

There is no requirement for water to be bottled or even from a water fountain. Tap water from a sink, as long as it meets the standards for drinking, meets OSHA’s requirement.

Portable containers that carry water are also permitted. Containers must be clearly marked, tightly closed, have a tap for dispensing the water, and may not be used for any other purpose. Water is not to be dipped from containers. Shared drinking cups or bottles are not permitted.

October 18th, 2016, 2:05 PM |  Posted in: Workplace Health & Safety |
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Hours Worked

In the state of South Carolina, is there a limit on the number of hours an employee can work per day, per week – on going weeks? This is in a manufacturing plant/setting. Thank you.

The federal Fair Labor Standards Act (FLSA) establishes minimum wage, overtime pay, recordkeeping, and youth employment standards affecting employees in the private sector and in Federal, State, and local governments.

The FLSA doesn’t limit the number of hours in a day or days in a week an employee may be permitted or required to work. This goes for exempt and non-exempt employees.

Some states have adopted days of rest laws; however, South Carolina is not one of them.

Now, this doesn’t mean an employer should require employees to work long hours or for weeks straight with no days off. Excessive work hours and unusual shifts can result in fatigue on the worksite. Depending upon the job, especially in a manufacturing plant this can mean an increased safety risk both for the employee and his/her co-workers. Thus, employers are encouraged to limit extended shifts and unusual work schedules.

October 18th, 2016, 2:00 PM |  Posted in: Labor Laws |
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Help Writing a Letter to HOD

How do I write a letter to a HOD informing them to not deduct salary from staff and that the HOD must take the responsibilities on what he/she is instructed to do?

The federal Fair Labor Standards Act (FLSA) establishes compensation regulations affecting employees in the private sector and in Federal, State, and local governments. Some states have also adopted their own compensation regulations.

It’s incredibly important for a Head of a Department (HOD) to be aware of any and all laws regarding deductions from employees’ wages and the consequences of violations. Not only will the employer be held liable for a FLSA violation but an individual acting in the interest of the employer, like a HOD can be personally liable as well.

The tone of your letter depends on whether it’s meant to be simply informative in nature or a warning for not adhering to company policy or applicable law. If the HOD in question has repeatedly violated company policy or the FLSA, then the letter should be stern and include a clear warning and the consequences of another infraction.

Here is a general sample letter focusing on deductions from exempt employees’ salaries:

Dear John Smith,

As a HOD it’s imperative that you’re aware of both federal and state employment laws. Since you’re responsible for the ensuring employees are compensated appropriately we would like to reiterate wage guidelines set forth by the federal Fair Labor Standards Act (FLSA), specifically permissible deductions from exempt employees’ salaries.

There are limited permissible deductions from an exempt employee’s salary including:

  • When an employee is absent from work for one or more full days for personal reasons other than sickness or disability;
  • For absences of one or more full days due to sickness or disability if the deduction is made in accordance with a bona fide plan, policy or practice of providing compensation for salary lost due to illness;
  • To offset amounts employees receive as jury or witness fees, or for temporary military duty pay;
  • For penalties imposed in good faith for infractions of safety rules of major significance;
  • For unpaid disciplinary suspensions of one or more full days imposed in good faith for workplace conduct rule infractions;
  • In the employee’s initial or terminal week of employment if the employee does not work the full week, or
  • For unpaid leave taken by the employee under the federal Family and Medical Leave Act (FMLA).


If you have any doubt whether a deduction is permissible please contact us for clarification prior to making the deduction.

As an HOD acting on behalf of the company, it’s your responsibility to understand and follow FLSA wage regulations. Please take the time to review permissible deductions and contact us with any questions.

Thank you,

ABC Company



October 18th, 2016, 1:34 PM |  Posted in: Compensation |
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Work Release for Exempt Office Worker

We had a manager who had an acute stroke and had to leave the office. They were hospitalized for 3 days. Their Doctor released them to go back to work. The note stated they could return on Friday, but the employee came to work on Monday. When asked, the employee stated the Doctor just put a date, but said they could be back. Are we required to get a release to work note for office exempt workers?

An employer’s policy or practice of requiring employees to obtain a work release from their Doctor after an injury or illness shouldn’t be based on FLSA classifications. The criteria should focus on the employee’s job functions, specifically if the employee’s injury or illness could pose a safety threat either to the employee him/herself or to other workers. It’s common to base the need for a work release on job titles.

Remember, the purpose of obtaining a work release is to receive confirmation from a physician that the employee is able to safely carry out their work duties. If you received a Doctor’s note that restricts an employee’s ability to work until a set date then such instructions should be adhered to. Although the employee in this case is stating the date was not definitive and he’s permitted to work sooner, it’s best to obtain an updated note from the Doctor before allowing the employee to work. Otherwise, there is a risk that the employee may not actually be well enough to work and you’ve allowed him to go against Doctor’s orders. If the employee then caused an accident attributed to his medical condition, there’s a chance you may be held liable for any damages.


October 18th, 2016, 12:51 PM |  Posted in: Workplace Health & Safety |
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