I need to double check my answers, please help. Do you remember Jay Leibhempski
ID: 326235 • Letter: I
Question
I need to double check my answers, please help.
Do you remember Jay Leibhempski from the first test? He was the guy who was injured in a gas explosion while smoking a marijuana cigarette as his neighbor was looking for Marcellus shale gas. He received a large settlement from Elizabeth as a result of the injuries sustained in the explosion.
Jay decided to use some of his award to open a kite shop near Shippensburg University. Before hiring any employees, Jay hires Dewey Cheatum, Esquire, to advise him on business matters. Mr. Cheatum explains the Fair Labor Standards Act to Jay, with special emphasis on the overtime rules. Although Jay is a pretty "chill" guy in most respects, he is not a great boss and intends to make his employees work very long hours--at least 50 hours per week. He does not like the idea of paying these individuals overtime. Jay informs Mr. Cheatum that he intends to hire no more than 5 employees. Mr. Cheatum suggests that he can escape the overtime rules by making each employee a "manager." Mr. Cheatum tells Jay to give the employees a title, but not to give them any managerial authority (Jay wants to keep all of the authority for himself). Specifically, Mr. Cheatum advises Jay to give each employee a name tag with the title of "manager," "assistant manager," "special assistant manager to the assistant manager" or similar position. However, each employee will be instructed to refer all questions or decisions to Jay, and each employee will be required to acknowledge that they have no authority to make decisions on behalf of Jay or the company.
Questions:
1. Assume that Jay takes Mr. Cheatum's advice. Has he avoided the overtime "problem?"
2. Is there a better way for Jay to avoid paying overtime in this case? Assume that Jay does not or cannot hire additional employees.
3. Has Mr. Cheatum's advice created any additional problems for Jay? If so, what are they? Please describe each in detail.
4. Has Mr. Cheatum violated any duties to Jay? If so, which one(s)? Please explain your answer completely.
Explanation / Answer
1. Assume that Jay takes Mr. Cheatum's advice. Has he avoided the overtime "problem?"
Has he avoided the over time problem by naming his employees as managers?
Managers and supervisors are not covered by overtime rules it is true. However just calling an employee as a manager or supervisor will not entitle exemption form the overtime provision as suggested by Mr. Cheatum.
For employees to be exempt from the overtime provision found in the Employment Standards Act (ESA) their nature of work should be that of supervisory or managerial and they should only do non-managerial or non-supervisory work on an irregular or exceptional basis.
Thus in order to get exemption from the over time rules it requires not only to call the employees as managers but define their job description as that of a managerial or supervisory position. In the presented case the job description is not of managerial or supervisory role and hence it will be a problem for the firm.
2. Is there a better way for Jay to avoid paying overtime in this case? Assume that Jay does not or cannot hire additional employees.
The better way for resolving the overtime wages problem will be to give employees substantial control over their hours of work and make at least two times the Manitoba Industrial Average Wage. (Both criteria have to be met for an employee to be exempt from overtime under this provision.)
Other alternative is to give them decision making and execution roles which must be vetted with Mr Jay in writing.
3. Has Mr. Cheatum's advice created any additional problems for Jay? If so, what are they? Please describe each in detail.
The additional problems created by the advice are:
4. Has Mr. Cheatum violated any duties to Jay? If so, which one(s)? Please explain your answer completely.
Yes, Mr Cheatum violated his duties to Mr Jay as he was hired to give proper lawful advice in setting up and executing the business. The advice provided is not in accordance to law and may attract penalties.