Wednesday, October 14, 2015

You Want Me to Do What?

Reportedly, Urban Outfitters, the hipster apparel and accessory store, recently emailed its exempt staff requesting that they “volunteer” their time on five or six weekend days  in the next couple of months to pack and ship merchandise for the company. The email supposedly explained that the coming months were the busiest for the company and essentially everyone had to pitch in to keep the customers happy and the work flowing. Urban Outfitters characterized the volunteer time as team building which would enhance the bond between the company and workers. Maybe some would disagree, but I can’t imagine anything that most employees would rather do than give up weekend time to work for their employer for no extra pay.

Morale issues aside, it raises the question of whether exempt employees can volunteer their time for their employer to do non-exempt work. The simple answer is that for a short period of time, like Urban Outfitters has requested, they probably can. Although non-exempt employees cannot do their assigned duties, or those similar to their regular job, for free, exempt employees are paid a salary for any amount of work they perform for their employer.

The FLSA white collar exemption is not destroyed because the otherwise exempt employee occasionally performs non-exempt work. One of the tests for the white collar exemption is whether the employee’s primary duties fall within one of exempt categories. It would get much trickier if Urban Outfitters started demanding more and more “voluntary” non-exempt work from its exempt employees so that their primary duties shifted from exempt work to non-exempt.   

Maybe Urban Outfitters is just trying to get their money’s worth from these exempt employees before the anticipated change in regulations for white collar exemptions. Whether the new salary test defines these exemptions at the recommended annual salary of $50,440 or something somewhat below that, retailers like Urban Outfitters will be impacted the most. It’s a pretty safe bet that most of these “volunteers” will no longer be exempt by salary after adoption of the DOL’s new regulations.  

Similarly, although no specific recommendations were made to change the duties test for white collar exemptions, comments were requested on that component of the duties definition as well. It is not unreasonable to expect that the final DOL regulations on white collar exemptions might change not only the salary threshold, but the duties test too. Speculation exists that a new duties test will create a bright line as to the percentage of non-exempt duties an employee can perform and remain exempt. 

While Urban Outfitters might be on the right side of the law now when it seeks volunteers from its staff to work for no extra pay, it better take advantage of that now because it will likely all change. All employers should be take time before the changes to the regulations are finalized, and analyze the jobs of employees whose exempt status might change. Factors to consider in that analysis include how many hours exempt employees currently work in a week to determine the cost of the job if the employee becomes non-exempt, as well as whether those hours can be controlled and maintained at or around 40 in most weeks.

One thing is for sure, under the new or old regulations, asking employees to volunteer their time is risky under the law and can certainly give the employer a bad reputation.