Read the following and answer the questions. (Total 10 Points) (Subject: Into to Compensation)

IS MABEL JONES POSITION EXEMPT FROM OVERTIME PAY?

Mabel Jones is the most senior employee in the office of Olympia Electrical Manufacturing Company. Mabel has worked for OEMC for 25 years, and her job title is Office Manager. There are six other clerks in the office. She has trained all six of them and, when they have a problem, they usually come to her for advice or assistance. Management recognizes her as a good and faithful employee.Mabels husband, Ed, who works on the other side of town, drops her off at work by 7:30 each morning. Since she is usually the first office person to arrive, her daily routine begins by making the first pot of coffee for the office staff. While the coffee is brewing, Mabel sorts the new mail (already delivered by the post office) and places it in the appropriate employees mailbox. After sorting the mail, Mabel sits down and enjoys her first cup of coffee. While having her coffee, she reviews her own mail, looking especially for checks from customers who have been late in paying their bills.During a typical day, Mabel spends about 40% of her time posting expenses and payments to a number of different accounting ledgers. She also spends between 5 and 10% of her time in conferences with higher levels of management. Seldom does a day go by that she isnt providing guidance or training to one of the six clerk-secretaries in the office.The remainder of her time is spent on the telephone responding to client inquiries regarding shipping dates, quality issues, and other similar problems. Although she quite often cannot give the customer the desired answer, she is able to transfer the call to the individual who can provide the necessary information. If a customer isnt happy with the answers, he or she often checks back with Mabel who then attempts to obtain a better answer for the customer.In addition to receiving $975 per week, Mabel earns approximately $5,000 in commissions each year for late collections that her telephone calls have helped to bring in. Many years ago, Olympia turned over to a collection agency all unpaid bills over 90 days in arrears. Mabel had mentioned to her boss that she thought she could help collect the money because, over the years, she had become familiar with many of their customers and had a good working relationship with them. They would talk to her about their problems with Olympia, and she was often able to assist them. Mabel proved to be very successful in this assignment, so management decided to quit using the collection agency and instead pay Mabel a commission for all late payments she collected. The commission she receives amounts to about half of that paid to the collection agency.When not talking on customer-originated calls, Mabel performs her collection calls. She keeps a detailed diary of each past-due customer, noting the date and time of the conversation, what was said, and to whom she spoke. She quite often makes some of her collection calls during her lunch break. All office people know they have one hour for lunch, and four of the ladies usually go off the premises each day, while two usually spend their hour in the company cafeteria. Mabel is a brown-bagger, and eats her lunch at her desk. If no one else is in the office, she answers all incoming calls in addition to making some of her collection calls.The office closes at 5:00 p.m., at which time most of the office staff promptly leave. Mabels husband, however, does not get off work until 5:30 p.m., and he doesnt arrive to pick her up until shortly after 6:00 p.m. During the time from 5:00 to 6:00pm, Mabel makes more collection calls, and at that time is frequently able to contact some of those with late payment problems whom she couldnt contact earlier in the day. Currently, Olympia Electrical Manufacturing has Mabels position of Office Manager classified as exempt from overtime pay.

ANSWER THE FOLLOWING QUESTIONS :

(1) Is the Office Manager position (as performed by Mabel) correctly classified as exempt from over-time pay? You should refer to the FLSA Exempt Criteria document to answer this question.If exempt, in which category of exemption is it included? Explain how this job meets the criteria. If you think it should not be exempt, which criteria did the position not meet in the Executive and Administrative categories? Hint: it helps to create a list of the various tasks Mabel performs and the percent of time spent on those tasks; do not assume she has responsibility for any tasks not mentioned in the case.

(2) If this position were not exempt, how many hours per week, on average, should Mabel receive overtime pay (assume she takes a 30-minute unpaid break to eat her lunch)? And, what is her overtime pay rate (in dollars) per hour? Hint: to convert the weekly pay rate to an hourly pay rate, you should base it on thenumber of actual hours she works each week. Money earned through commission should be included as part of her pay.

(3) Assume this position has been incorrectly classified as exempt (i.e., it should be nonexempt from overtime pay), what should (or could) Mabels boss do to be compliant with the Fair Labor Standards Act overtime provision? Be specific. Hint:There are at least 3 different ways Mabels boss could be in legal compliance, that range from changing Mabels behavior, changing their pay practices, to changing the job requirements.