Is Caterer Overseeing Kitchen Eligible for Overtime Wages?

The Bloomberg BNA Payroll Library gives you reliable, up-to-date guidance and analysis in every area of payroll administration and compliance, and includes hundreds of interactive forms and links to related federal, state, and local sites.

By Westley Thompson

“I spend 90 percent of my time cooking with the regular kitchen workers,” said Sarah, chef de cuisine of a catering company. “I'm in meetings before my shift and I oversee all food preparation. I should be paid overtime for all the work I do.”

“I'm afraid we don't owe you overtime,” said Jeff, the company manager. “You are considered an executive. Besides, you knew that the job was a management position when you accepted our offer.”

FACTS: A catering company hired a chef de cuisine, a high-ranking kitchen position that reported to the executive chef. As chef de cuisine, the employee was responsible for supervising the day-to-day operations of the kitchen. The employee also was in charge of the kitchen when the executive chef was absent.

The duties of the supervising chef included directing the cooks, overseeing food production, monitoring job assignments and procedures and managing kitchen workers. In one instance, the chef reported that the sous chef had been unprepared for an event. The report, which was given to the executive chef, led to the sous chef's dismissal.

The supervising chef was required to attend managerial meetings on Mondays if she was scheduled to work that day. Attending the meetings also were the executive chef, department directors and sales representatives.

Her salary was $45,000 a year at the time of hiring and she earned $18 an hour when working at off-site locations. Her salary was raised to $52,000 a year, plus $20 an hour when she worked off-site assignments, though she only received one paycheck at this salary before resigning.

Additionally, she was not required to enter her hours via a time clock, a practice required of cooks and other staff members.

The employee worked at the company for two months, which coincided with the busiest time of the year for the company. She asked for overtime wages from her employer, claiming that she worked more than 40 hours a week and spent 90 percent of her time cooking. The employer denied her request, saying that she was an executive who was exempt from overtime wages. 

The employee resigned from the company and filed a lawsuit seeking back overtime wages under the Fair Labor Standards Act.

ISSUE: Was the former employee entitled to overtime compensation?

DECISION: The chef de cuisine was not entitled to overtime compensation, a federal district court ruled.

The chef was exempt from the overtime provisions of the Fair Labor Standards Act because she was employed in a “bona fide executive capacity,” the court said.

A bona fide executive capacity is one where an employee's primary duty is managerial and includes particular weight in personnel decisions, compensation of more than a certain amount and directing the work of other employees, the court said.

Although time spent performing exempt duties is a factor when determining whether an employee is classified as an exempt executive, other criteria also are taken into account, the court said.

Courts look at four criteria: salary; primary duties; the direction of at least two other employees; and whether the employee has a significant influence on the hiring, firing or change of status of another employee.

A minimum weekly salary of $455, or $23,660 a year, is required to be considered an exempt employee under the FLSA. At the time of her resignation, the supervising chef's annual salary was $52,000.

The court decided the primary duties were clearly managerial in nature. As chef de cuisine, she was second-in-command in the kitchen and supervised its day-to-day operations, and she was included in managerial meetings.

The employee claimed that because she spent 90 percent of her time cooking, her duties were not primarily managerial in nature. The court disagreed, saying that strict time divisions are misleading in circumstances when management functions cannot be easily separated from production functions. The employee's duty of ensuring the cooks' proper performance was more important than her duties as a cook, it said.

Additionally, she directed two or more employees and she regularly handled staff grievances, discipline and compliance with company standards, the court said (Carreras v. Thierry's Inc. 2015 BL 199956, S.D. Fla., No. 1:14-cv-21188, 6/23/15).

POINTERS: The FLSA has clear conditions designating an employee as an exempt executive.

In addition to a minimum weekly salary of $455, an employee must manage a department, direct the work of at least two employees and have the authority to fire, hire or the change the status of another employee to be exempt from overtime under the FLSA.

The overtime threshold may change, however. Under a Labor Department proposed rule (RIN 1235-AA11), the overtime threshold would rise to $50,440 in 2016 from $23,660 a year in 2015, and salaried workers earning $970 a week in 2016 would be eligible for overtime, up from $455 a week in 2015.

For more information, see PAG's “FLSA Exemptions” chapter.

This analysis illustrates how courts resolve pay-related disputes. The names and dialogue are fictitious.