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manager and area sales manager positions qualify for the executive exemption under
section 13(a)(1) of the FLSA. You ask whether the store manager loses his or her exempt
status during the training period.
You note that 29 C.F.R. § 541.705 states, “exemptions do not apply to employees
training for employment in an executive . . . capacity who are not actually performing the
duties of an executive . . . employee.” You also note that exemptions normally apply on
a workweek by workweek basis. You point out, however, that in this case, the store
managers have been working for years as bona fide exempt managers. You cite Wage
and Hour Opinion Letter June 14, 1968, which declined to offer an opinion regarding the
exempt status of employees “during the portion of the training program that is between
the periods in which they are clearly exempt under the regulations” pending clarification
of the courts. You also cite to a federal district court case in which the plaintiff was
found to be exempt during a period of training that was between two periods in which he
qualified as an exempt systems engineer. See Booth v. EDS Corp., 799 F. Supp. 1086,
1093 (D. Kan. 1992). (“[The plaintiff] has pointed to no evidence in the record that
indicates that he or EDS considered phase two of the [training] program to be a separate
employment position.”).
The fact that, during at least some of the weeks of training, the store managers do not
perform significant amounts of exempt work, in and of itself, does not cause the store
managers to lose their exempt status because the primary duty test for executives need
not be met each and every workweek in all cases. In its 2004 revisions to 29 C.F.R. Part
541, the Department included this discussion in the preamble to the final regulations:
As stated in the 1949 Weiss Report at 61, the search for an employee’s
primary duty is a search for the “character of the employee’s job as a
whole.” Thus, both the current and final regulations “call for a holistic
approach to determining an employee’s primary duty,” not “day-by-day
scrutiny of the tasks of managerial or administrative employees.” Counts
v. South Carolina Electric & Gas Co., 317 F.3d 453, 456 (4th Cir. 2003)
(“Nothing in the FLSA compels any particular time frame for determining
an employee’s primary duty”). To clarify this “holistic approach,” the
Department has reinserted in subsection (a) the language from current
541.304 that the determination of an employee’s primary duty must be
based on all the facts in a particular case “with the major emphasis on the
character of the employee’s job as a whole.”
69 Fed. Reg. 22,122, 22,186 (Apr. 23, 2004) (emphasis in original).
In this case, there is no reason to believe that the seven-week training program itself is an
employment position in the company. Nor is it reasonable to conclude that the store
managers’ primary duty changes during the seven weeks of training. These employees,
who we are to assume have been employed as bona fide exempt store managers for years,
remain exempt during the seven weeks of management training because their primary
duty continues to be that of an exempt store manager. The training provided is of limited
duration and does not consist of the performance of work that would otherwise be
performed by nonexempt workers. The managers return to their normal exempt store