Do store managers need to be onsite to manage?
Issue:

Your company typically staffs its retail stores with a store manager and one other employee at all times. The store manager is responsible for, and has supervisory authority over, all of the store’s employees (often five to eight individuals). The employees together work in excess of 80 hours per week. Because of the store’s size and staffing levels, however, the store manager physically or in person supervises less than 80 employee hours per week. Do the managers qualify for the executive exemption under Section 13(a)(1) of the Fair Labor Standards Act, which requires that an employee must customarily and regularly direct the work of two or more other employees?
Answer:    

Yes. A store manager doesn’t need to be physically present at the store in order to manage its workers, according to a recent opinion letter issued by the Department of Labor. As long as the manager customarily and regularly directs the employees' work, his actual presence is not necessary for him to be deemed an executive employee under the FLSA, and thus exempt from overtime. Assuming all other Section 13(a)(1) exemption requirements are met, an absentee manager that continues to be responsible for the employees' work and other personnel issues is exempt.

Directing the work. Ways in which a store manager might customarily and regularly direct the work of subordinate employees, even when the manager is not present on the premises, include:

  • Remaining responsible for ensuring that company policies and the manager’s instructions are carried out by all subordinates by following up on assigned tasks on a daily basis and monitoring employee productivity and sales goals;
  • Planning employee work loads;
  • Setting and adjusting employees’ hours of work;
  • Appraising employee productivity and efficiency;
  • Handling employee complaints and grievances;
  • Disciplining employees;
  • Remaining on call and taking responsibility for emergencies such as a sudden store closing;
  • Routinely calling or stopping by a store when not on duty until confident that the assistant manager can effectively handle situations in the store manager's absence.

Source: Wage & Hour Opinion Letter No. 2531 (FLSA2006-35), September 21, 2006, 05-08 CCH WH ¶31,421
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