Steak ‘N Shake Makes a $7.7 Million Error. (You’re Probably Making the Same Error.)

by Evil HR Lady on May 20, 2019

Managers are always salary exempt and are not eligible for overtime pay. 

This is a common belief but it simply isn’t true. In fact, your job title has nothing to do with how you have to be paid–it’s all about your job responsibilities. Steak ‘N Shake found out the hard way that they had misclassified 286 store managers in the St. Louis area and owed them back overtime pay.

Oh, and attorney fees and costs.

Grand total? $7.7 million dollars.

Steak ‘N Shake’s error

The Fair Labor Standards Act requires that everyone receive overtime pay if they work more than 40 hours in a week unless they meet the qualifications for “exemption.” People who manage two or more employees, earn at least $23,660 (set to jump to $35,308 in January 2020) and have hire/fire/discipline power generally meet the conditions for exemption from overtime pay and can be paid a straight salary–regardless of how many hours they actually work. (Some states have additional rules, but these are the federal minimums.)

To keep reading, click here: Steak ‘N Shake Makes a $7.7 Million Error. (You’re Probably Making the Same Error.)

{ 2 comments… read them below or add one }

jccbeach May 20, 2019 at 7:42 pm

This has me thinking. I was hired as a “working” manager. I.e., when there is a need, I do the same tasks as subordinates. And, when I spoke with subordinates about poor job performance and provided examples, it showed up on my job performance as inability to build a team. That result leads me to believe I don’t have true discipline “power” which I haven’t even tried. I figure if I’m penalized for discussing improving job performance, discipline is for sure off the table. Forget about trying to hire or fire an employee. I have to have consensus of a committee. Now I’m not sure any employee here is truly a “manager”. Thank you.

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MariaRose May 21, 2019 at 12:19 am

When a company tells you that your job is a “working manager”, expect to be the job to mean, you are the person who does all the tasks that no one else will do on top of maintaining the “required” paperwork. The only way to discipline is by adding extra paperwork to get those needed writeups so that non-productive employee gets the message to shape up or you finally have the documentation to fire them with no hassle from the Labor board for unemployment. Yeah, even lazy employees get unemployment benefits for merely showing up for work enough hours.
A lot of jobs in the retail food service business have done what is described in the article, especially if they are a franchise enterprise. Ease your way, very carefully out of this position, without getting yourself blocked from another job.

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