Reference no: EM132877761
The question I would like help answer is :
(Read the "Reports on Mabel Jones" (Exhibit 1-1) AND Habit 1-2 written below.)
- Determine whether Olympia is required by law to pay Mabel overtime?
- Document the reasons for your answer.
Exhibit 1-1 Mabel Jones
Mrs. Mabel Jones is the most senior employee in the office of Olympia Electrical Manufacturing Company. Mabel has worked for Olympia for 25 years, and her job title is Office Manager. There are six other clerks in the office. She has trained all six of them and, when they have a problem, they usually come to her for advice or assistance. Management recognizes her as a good and faithful employee.
Mabel's husband Ed, who works on the other side of town, drops her off at work around 7:25 each morning. Since she is usually the first official person to arrive, her daily routine begins by making the first pot of coffee for the office staff. While the coffee is brewing, Mabel sorts the mail and places it in the appropriate employees in a basket or mailbox. (The Production Manager, who arrives even earlier, picks up the mail at the post office on his way to work each morning and, on arriving at Olympia, he places it on Mabel's desk before 7:00 a.m.) After sorting the mail, Mabel sits down and enjoys her first cup of coffee. While having her coffee, she reviews her incoming mail, looking especially for checks from customers who have been late paying their bills.
In addition to receiving $795 per week, Mabel earns $1,250 in commissions during a quarter (3 months) and is paid that amount at the end of the quarter for late collections that her telephone calls have helped bring in. Many years ago, Olympia turned over to a collection agency all unpaid bills over 90 days in arrears. Mabel had mentioned to her boss that she thought she could help collect the money because, over the years, she had become familiar with many of their customers and had a good working relationship with them. They would talk to her about their problems with Olympia, and she could often assist them.
Mabel proved to be very successful in this assignment, so management decided to quit using the collection agency and instead pay Mabel a commission for all late payments she collected. The commission she receives amounts to about half of that paid to the collection agency.
During a normal workday, Mabel spends about 40% of her time posting to several different ledgers. She also spends between 5 and 10% of her time in conferences with higher levels of management. Seldom does a day go by that she isn't providing guidance or training to one of the six clerk-secretaries in the office.
The remainder of her time is spent on the telephone responding to client inquiries regarding shipping dates, quality issues, and other similar problems. Although she cannot give the customer the desired answer, she can transfer the call to the individual who can provide the necessary information. If a customer isn't happy with the answers, they often check back with Mabel, who then attempts to answer the customer better.
When not talking on customer-originated calls, Mabel performs her collection calls. She keeps a detailed diary of each past-due customer, noting the date and time of the conversation, what was said, and whom she spoke. She quite often makes some of her collection calls while she eats lunch. All office people know they have an hour for lunch, and four of the ladies usually go off the premises each day, while two usually spend their hour in the company cafeteria. Mabel is a "brown-bagger" and eats her lunch at her desk. If no one else is in the office, she answers all incoming calls in addition to making some of her collection calls.
The office closes at 5:00 p.m., and all of the office help is usually gone by 5:02, if not a few minutes before 5:00. Mabel's husband, however, does not get off work until 5:30 p.m., and he doesn't arrive to pick her up until shortly after 6:00 p.m. During the time from 5:00 to 6:00, Mabel makes more collection calls, and at that time, she is frequently able to contact some of those with late payment problems that she couldn't contact earlier in the day.
**Then, read this:
Habit 1-2
OLYMPIA GUIDECHART FOR
FAIL LABOR STANDARDS ACT
QUALIFICATIONS FOR EXEMPTION FROM OVERTIME PAY
The four categories of employees that may qualify for exemption from overtime pay are Executive, Administrative, Professional, and Outside Sales. It is crucial to have a clear understanding, in general, of what differentiates Exempt and Nonexempt positions so that any jobs may be properly categorized and therefore maintained within the framework of the Fair Labor Standards Act. The following are general definitions:
An Exempt position is one, which, by its non-routine nature and higher required compensation, demands skills and talents to make those decisions that substantially impact the management, technology, legality, or financial stature of an organization.
A Nonexempt position is one which, by its more routine nature and lower required compensation, demands only a level of skill and talent necessary to carry out the more routine and less discretionary activities essential to supporting those functions which actions impact the management, technology, legality, or financial stature of an organization.
The following are specific definitions:
EXECUTIVE
To be qualified as an "Exempt Executive" employee, all six of the following tests must be met:
(a) Has a primary duty consisting of the management of Olympia or a department or subdivision thereof; and
(b) Customarily and regularly supervises the work of at least two other full-time employees or the equivalent thereof; and
(c) Has the authority to hire or fire other employees, or recommend hiring and firing or promotion, or other change of status of other employees; and
(d) Customarily and regularly exercises discretionary powers; and
(e) Does not devote more than 20% (less than 40% if a retail or service establishment employs him/her) of his hours of work to activities not directly and closely related to his managerial duties; and
(f) Receives payment on a salary basis at a rate of not less than $155/week ($8,060/year) exclusive of board, lodging, or other facilities.
Streamlined test for high-paid Executive:
Regardless of other considerations, an executive employee paid at least $250/week ($13,000), exclusive of board, lodging, or other facilities, maybe "Exempt" if he meets tests (a) and (b) above.
ADMINISTRATIVE
To be qualified as an "Exempt Administrative" employee, all five of the following tests must be met:
(a) Performs office or non-manual work directly related to management policies or general business operations of his employer or his employer's customers; and
(b) Customarily and regularly exercises discretion and independent judgment; and
(c) Regularly and directly assists a proprietor, executive, or administrator, or performs under only general supervision work along specialized or technical lines requiring special training, experience, or knowledge, or executes under only general supervision special assignments; and
(d) Does not devote more than 20% of the hours worked in a workweek (40% in a retail or service establishment) to activities that are not directly and closely related to those in (a), (b), and (c) above; and
(e) Receives payment on a salary or fee basis at a rate not less than $155/week ($8,060/year), exclusive of board, lodging, or other facilities.
Streamlined Test for Administrative Employee:
Regardless of other considerations, an administrative employee paid at least $250/week ($13,000), exclusive of board, lodging, or other facilities, maybe "Exempt" if he meets tests (A) and (b) above.
PROFESSIONAL
To be qualified as an "Exempt Professional" employee, all five of the following tests must be met:
(a) Primary duty consists of the performance of work requiring knowledge of an advanced type in the field of science or learning customarily obtained by a prolonged course of specialized instruction and study or work that is original and creative in character in a recognized field of artistic endeavor and the result of which depends primarily on the invention, imagination, or talent of the employee; and
(b) Work requires the regular exercise of discretion and judgment; and
(c) Work is predominately intellectual and varied in character and is such that the output produced or the result accomplished cannot be standardized concerning a given period of time; and
(d) No more than 20% of the hours worked in the workweek are devoted to activities other than those described in tests (a), (b), and (c) above; and
(e) Must be compensated at a rate not less than $170/week ($8,840/year), exclusive of board, lodging, or other facilities.
Streamlined Test for Professional Employee:
Regardless of other considerations, a professional employee paid at least $250/week ($13,000), exclusive of board, lodging, or other facilities, maybe "Exempt" if he meets tests (a) and (b) above. However, for personal computer-related occupations, the computer professional exemption allows computer professionals to be paid hourly and maintain the exemption. The required hourly rate for exemption is $27.63/hour.
OUTSIDE SALES
To be qualified as an "Exempt Outside Salesperson," both of the following tests must be met:
(a) Employed for and is customarily and regularly engaged away from his employer's place or places of business in making sales or obtaining orders or contracts for services or for the use of facilities for which the client or customer will pay a consideration. Work performed incidental to and in conjunction with the employee's own outside sales or solicitations, including incidental deliveries and collections, shall also be regarded as Exempt work; and
(b) Hours of work of a nature other than described immediately above do not exceed 20% of the hours worked in a workweek by Nonexempt employees of the employer.