The US Department of Labor (DOL) recently issued Administrator signed Opinion Letter FLSA2008-19. Although Opinion Letters only apply to the exact set of facts and circumstances presented in each case, they are a valuable aid in understanding current interpretations of the Fair Labor Standards Act (FLSA).
This Opinion Letter confirms that exempt store managers do not lose their exempt status while training to become area sales managers. The company chooses store managers who are top performers to enter a seven-week training program to become area sales managers. Eight to ten store managers report to one area sales manager. At the beginning of the training period, the trainee performs little to no exempt work. As the program progresses, the trainee gradually assumes most to all of the responsibilities of the trainer. Successful trainees return to their store manager position to await an opening and a promotion. Unsuccessful trainees just return to store manager duties.
For this letter, the DOL assumed that both the store manager and area sales manger positions were exempt. Even though for some weeks of the training, the trainees may have performed mostly non-exempt work, the executive exemption need not be met or tested on a week-by-week basis. Since the primary duty of the trainees remained as store managers and since they did not perform “work that would otherwise be performed by nonexempt workers”, there is no reason for the trainees to lose their exempt status during the training program.
State laws may provide rules that are more beneficial to the employee and must be followed. Contact Vision Payroll if you have questions about this Opinion Letter.