Store Manager Entitled to Overtime Pay
June 19, 2013 by Abenicio Cisneros
California employment law provides guidance for overtime pay related to exempt and non-exempt job duties. This case summarized by Beeson, Tayer & Bodine provides guidance that helps establish employee rights to overtime pay. A California Court of Appeals has confirmed that managerial employees in California can qualify for overtime pay when their employer’s policies realistically require them to engage in “non-exempt” (non-managerial) work over 50% of the time, even if their employer claims that the non-exempt work is being done simultaneously with exempt work. In Heyen v. Safeway Inc., the Court of Appeals upheld a trial court’s award of overtime pay to an assistant manager of a Safeway who, due to Safeway’s policies, spent more than 50% of her time engaged in non-exempt work such as bagging, checking, and bookkeeping.
Employees in California are entitled to overtime pay unless they fall within a specific statutory exemption. Management employees often fall within the “Executive Exemption” which requires – among other things – that management employees be engaged in management duties more than 50% of the time. If a manager spends more than 50% of her time engaged in non-management (thus non-exempt) duties, she may qualify for overtime pay. In California, to determine whether more than 50% of an employee’s duties are exempt, the “reasonable expectations rule” instructs courts to look at the duties an employer reasonably or realistically expects or requires employees to complete. Here, Safeway tried to defeat the award of overtime pay by arguing that assistant managers were simultaneously “actively managing” (exempt work) while bagging and checking (non-exempt work), and thus such time should count as exempt from overtime purposes. Safeway also argued there was no reasonable expectation that managers engage in more than 50% non-exempt work and that this assistant manager was doing more non-exempt work than Safeway would prefer.
The Court of Appeals rejected both arguments. First, the Court made it clear that the law doesn’t recognize “hybrid” work. For overtime purposes, an employee’s work is either exempt or non-exempt, depending on the purpose for which the work was completed. Second, the Court held that Safeway’s policies – which imposed strict store performance standards while limiting managers’ ability to budget more labor hours – made it unrealistic for store managers and assistant managers to meet their obligations without engaging in non-exempt work themselves more than 50% of the time.
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