“Overtime” refers to the requirement that workers be paid at the rate of one and a half times their regular pay rate for time worked over 40 hours in a 7 day period. This practice, commonly referred to as “time and a half”, is a federal regulation administered by the Department of Labor. However all employees are not covered by these mandates, and this year there has been much discussion about extending eligibility to cover many more workers.

One of the current exceptions to overtime regulations concerns employees in management positions. Many retail chains have taken advantage of this exception.  But we learned the hard way (through a costly audit) that this rule is not applied evenly to all stores. An independent retailer with the owner/s present may not be qualified to have any employee be considered a manager. Paying a salary instead of an hourly rate does not guarantee this status.  The main criteria has to do with whether the supervision of other workers is their main duty, as opposed to serving customers and dealing with merchandising.

New federal regulations would mean that more store managers and assistant managers would be entitled to overtime in stores that currently not only don’t pay these employees overtime — but in fact often expect them to regularly work beyond the standard 40 hour work week without extra compensation. The DOL recognizes this in their statement about the proposed rule making: “a convenience store manager….may be expected to work 50 or 60 hours a week or more, making less than the poverty level for a family of four, and not receive a dime of overtime pay.”

In arguing against changing the threshold for overtime, the National Retail Federation states that “putting managers under overtime rules could undermine their status as career professionals rather than hourly workers.”  And yet the NRF survey showed that half of the time worked by these managers is devoted to customer service, which means that they should not be exempt from overtime to begin with.  No matter what changes take place in the regulations, it is important to level the playing field so that the same rule apply to big retailers and independent stores.

Another aspect of the current overtime regulation that we have trouble with is the fact that if you have a two week pay period, an employee can’t work 41 hours one week and 39 the other without being payed overtime for the 41st hour. As the law states, “Averaging of hours over two or more weeks is not permitted.” I’m sure that many of us would like to have more flexibility in the system — especially our employees, who want to work as many hours as their schedule allows but who have to watch that they don’t surpass the limit within any seven consecutive days.

Overtime at time and a half is a cost that stores understandably try to avoid — and no one should be expected to work a single hour without being compensated. However one voice missing from this discussion is that of the employee who has to get a second job in order to work 43 hours a week.  Raising the number of hours before overtime kicks in to 43 or 45 might be be a compromise that would make the NRF happier with the proposed changes. And allowing for a limited number amount of comp time within a stated period (two weeks, for example) would give stores the flexibility to schedule each employee for the number of hours that works best for both the store and the staff.

Happy Retailing,

Carol “Orange” Schroeder