The Salaried Shift Lead Who Runs the Fryer
Paradise Bowl, a fast-casual restaurant in Tampa, pays Luis a fixed $1,150 per week and calls him an 'exempt shift lead.' He opens the store three days a week, counts the drawer, and sometimes orders produce. The other two days he works the line, breads chicken, and runs the register beside hourly staff. He has no authority to hire, fire, or discipline; the general manager approves schedules and time off. Company policy deducts a full day's pay when Luis misses a shift for personal reasons, and last month it deducted $120 when he left four hours early for a dental appointment. Luis typically works 52-58 hours per week and receives no overtime. After he complains about the deduction, the owner reclassifies him as hourly but does not pay back overtime for the prior six months. Luis asks whether the reclassification was correct and what he is owed. The restaurant has 22 employees and $2.8 million in annual sales.
1. Was Luis properly classified as exempt under the FLSA? Analyze both the salary-basis and duties tests.
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Conclusion: likely non-exempt. The salary-basis test is not satisfied cleanly because the employer docked $120 for a four-hour absence. Under 29 C.F.R. § 541.602, an exempt employee's predetermined salary may not be reduced for partial-day absence, subject to limited exceptions such as FMLA or ADA leave. A full-day deduction for a full-day personal absence is generally allowed, but the partial-day deduction is evidence of improper treatment and can destroy the exemption. More importantly, the duties test fails. The executive exemption requires that the employee's primary duty be management of the enterprise or a recognized department, that he customarily direct two or more employees, and that he have authority to hire or fire or that his recommendations be given particular weight. Luis spends most of his time cooking, running the register, and doing production work, is closely supervised by the general manager, and cannot hire, fire, or discipline. Scheduling and occasional ordering are not enough to make management his primary duty. The administrative and learned-professional exemptions do not fit. Thus, he is non-exempt regardless of the salary label.
2. Assume Luis was non-exempt. What overtime and deduction issues arise, and what limitation period applies?
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If non-exempt, Luis is owed overtime for hours over 40 in each workweek. The regular rate depends on how the salary is allocated. If $1,150 was intended to cover a 40-hour week, the hourly rate is $28.75 and the overtime premium is $14.375 per overtime hour. Using that assumption, a 55-hour week yields 15 overtime hours x $14.375 = $215.63; a 58-hour week yields 18 x $14.375 = $258.75. If the salary was intended to cover all hours worked, the regular rate is $1,150 divided by total hours, and the employer still owes an additional half-time premium for overtime hours. The $120 partial-day deduction should be reversed if it reduced pay for time worked or violated salary basis; once reclassified, the employer may pay only for hours actually worked, but cannot keep an unlawful deduction. The FLSA limitation period is two years, or three years for willful violations. Florida law does not provide a separate overtime remedy, so the claim is federal. Liquidated damages may be available.
3. What practical compliance steps should the employer take now?
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The employer should stop treating Luis as exempt, convert him to hourly or use a lawful fluctuating-workweek arrangement only if properly explained in writing, and reconstruct time records from POS data, schedules, and testimony. It should pay all overtime for the two-year lookback period, or three years if the violation is willful, and reverse the $120 deduction. It should also audit other 'shift leads' and assistant managers who perform similar production work, train managers on the salary-basis and duties tests, and consult counsel before taking deductions. Finally, it must not retaliate against Luis for complaining; retaliation for asserting FLSA rights is separately prohibited.