Retail Misclassification Prevalent

Pursuant to the Fair Labor Standards Act (FLSA), generally, all non-exempt workers who put in more than 40 hours in any workweek are entitled to earn overtime pay at a rate of one and one-half times their standard rate of pay for the extra time worked. Thus, determining who is exempt and who is not is significant. A misclassification may result in workers being denied significant take-home pay.

One area that has been particularly subject to classification errors is in the area of retail. Often, managers of retail stores are salaried employees who are considered exempt. Exemptions fall into three categories – executive, administrative, or professional. Many times retail managers are incorrectly designated as exempt based on the executive exemption which covers:

1. Those employees whose primary duties consist of either managing an employer’s business or a specific department of the business.
2. Those who customarily and regularly direct the work of at least two full-time employees.
3. Those who have the authority to hire or fire other employees, or have significant input into hiring, firing, and other important employment decisions.

Typically, the jobs that qualify for this exemption are executive-level positions, high-level managers, and other individuals who manage and control some important aspect of the company’s business. However, in the retail arena, many times “managers” spend a significant amount of time performing non-managerial work.

In these situations, the executive exemption may not apply. Where management is not a worker’s primary duty (regardless of job title), such misclassification may deny workers overtime pay they deserve.

For more information about overtime pay or if you have questions concerning your employment classification, please contact the experienced Georgia wage and hour lawyers at Buckley Bala Wilson Mew LLP for an immediate case evaluation.