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Key Factors Affecting Compensation and Benefits; Fair Labor Standards Act (FLSA)

(1) EatNGas, Inc., founded in 1991, is a family-owned corporation with 15 combination convenience store/gas station locations and approximately 150 employees. A store manager is responsible for each store location. All accounting, budgeting, payroll, human resources, bulk ordering, energy corporation franchising, and overhead costing is handled at the corporate office.

The company currently uses a loosely structured management training program to develop future store managers. The program consists solely of assistant managers who have been hired or promoted from cashier positions. These individuals learn managerial skills and functions through on-the-job training during a one- to two-year period. The minimum qualifications for the management training program are that the applicant has a bachelor's degree (no specific curriculum), 6 months experience as a cashier, demonstrated dependability, and good customer service skills.

During the management training period, the assistant manager is responsible for the following:
- compiling the store's weekly employee shift schedule
- filling scheduling holes
- interviewing cashier applicants
- making recommendations for hiring
- totaling each shifts' cash register receipts
- observing the duties and activities of the store manager

Most of these functions are handled in the office in the back of the store. Each store manager handles the training process based on his or her own individual preference and needs. Approximately 20 to 30% of the assistant manager's week is spent on these functions. When not performing these tasks, the assistant manager performs the role of the cashier. Overall, an assistant manager will work between 50 to 60 hours per week, depending on the number of unscheduled absences by cashiers. Although the cashiers report solely to the store manager, they are expected to follow the instructions of the assistant manager.

The assistant manager's position is salaried between $21,800 and $32,000 annually and is exempt from overtime pay rates. When a cashier is promoted to an assistant manager, he or she generally receives a $1.00 per hour pay increase, which generally results in an offset of the lost overtime pay he or she would have received for the same amount of work. The pay increase is intentionally structured in this way because the main motivation for employees taking the promotion is to become a store manager with EatNGas, Inc.

In this assignment, you will assume the role of a EatNGas, Inc. corporate human resources generalist. You have been assigned the responsibility of performing an analysis of the assistant store manager position. You must determine if the position is in compliance with the federal Fair Labor Standards Act (FLSA).

Create a memo to the vice president of human resources summarizing your interpretation of the requirements of the FLSA as the requirements apply to this position. Segregate your findings into a minimum of five bullet points and provide an introduction, summary, and recommendation(s).

Use the Library and Internet to locate specific information on the requirements of the FLSA. It is recommended that you begin your search at the U.S. Department of Labor website.

(2) The Fair Labor Standards Act (FLSA) was modified in 1994. Explain how the changes in the FLSA were enacted and discuss the opinions and concerns that different associations, special interest groups, and political groups had at the time. Explain the rationale for these opinions and concerns. Use the Internet and other sources to research this issue before you draft your response.

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