Labor Shortages Can Create Unintentional Wage and Hour Liabilities

Parker Poe Adams & Bernstein LLP

Parker Poe Adams & Bernstein LLP

Employers facing worker shortages are having to use creative means to get their necessary work done. These shortages are especially apparent in the hospitality industry, where restaurants and other employers are scrambling to find enough workers. One way that employers are adjusting is to repurpose management employees to perform duties usually filled by hourly personnel. Employers should be careful to make sure that these reassignments, even if temporary in nature, do not result in wage claims.

For example, a restaurant facing labor shortages may have an assistant manager fill in as a server or line cook. Arguably, if this non-exempt work becomes the employee’s primary duties for a given workweek, the employer cannot claim the Fair Labor Standards Act (FLSA) overtime exemption for the employee for that week. Another example would be having a manager work as an extra bartender during busy hours at the restaurant. If the employer continues to classify the manager as salaried exempt, he or she may not be able to share in pooled tips generated by the bartending work.

These concerns do not mean that employers can never have exempt employees perform non-exempt duties. However, before making such reassignments, the company should think through the impact of such non-exempt work on their wage payment obligations to those employees.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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