A state appellate court in Los Angeles recently addressed the "multi-tasking" responsibilities of managerial employees and interpreted California's wage and hour laws in a manner different from FLSA regulations. In Heyen v. Safeway, Inc., the Court of Appeals for the Second Appellate District affirmed an advisory jury and court decision in favor of a grocery store assistant manager whom the jury and court found did not qualify for the executive exemption from overtime compensation under California law because the assistant manager regularly spent more than 50 percent of her work hours doing "non-exempt" tasks such as bagging groceries, bookkeeping, and stocking shelves.

Under Section 515 of the California Labor Code and the Industrial Wage Commission Wage Order 7 (Mercantile Industry), an exempt executive employee must be (1) "primarily engaged" in duties that meet the executive test of the exemption, and (2) must spend "more than one-half [of her] work time" engaged in such duties.

Safeway contended that the Plaintiff spent more than 50 percent of her work time performing exempt tasks, taking into account the Plaintiff's "concurrent performance" of exempt and non-exempt duties. According to Safeway, "Plaintiff could, and did, simultaneously perform management activities during the time she was performing 'hourly work' in the front of the store and on the sales floor."

The Heyen case appears to be the first appellate decision in California to directly rule on whether time spent on the "concurrent performance of exempt and non-exempt" work can count toward "exempt time" so as to meet the 50 percent threshold for the executive, administrative, or professional exemption. In Heyen, the trial court gave the following jury instruction on concurrent performance of exempt and non-exempt work:

The test to determine whether defendants have met their burden to show that the plaintiff spent more than 50% of her time engaged in exempt tasks is quantitative. The test requires, first and foremost, you must look to the actual tasks performed by the plaintiff...

If a party claims that an employee is engaged in concurrent performance of … exempt work and non-exempt work, you must consider that time to be either an exempt or a non-exempt activity depending upon the primary purpose for which the employee undertook the activity at that time. The nature of the activity can change from time to time.

(Emphasis in original.)

Safeway contended that that instruction was erroneous because "store managers necessarily multi-task by engaging in exempt and non-exempt activities at the same time." The appellate court found that although "there is some intuitive appeal to Safeway's contention, it is unsupported by California law." According to the court, the relevant inquiry is the reason or purpose for undertaking the task: "[I]f a task is performed because it is 'helpful in supervising the employees or contributes to the smooth functioning of the department for which [the supervisors] are responsible', the work is exempt; if not it is nonexempt."

In 2004, the U.S. Department of Labor promulgated new Title 29 Part 541 regulations which defined the terms "executive, administrative, professional and outside sales employees," and added a new section to the executive regulations entitled "Concurrent Duties." That section provides that "concurrent performance of exempt and nonexempt work does not disqualify an employee from the executive exemption if the requirements of §541.100 are otherwise met." (Emphasis added.)

Safeway argued that this provision supported its contention that the "concurrent performance of exempt and non-exempt" work should count toward "exempt time" so as to meet the 50 percent threshold. The court rejected this argument, noting that "in the nine years that have passed since the Secretary of Labor adopted these amended regulations, neither the California legislature nor the IWC has elected to follow them. We therefore have no authority to do so."

The Heyen decision serves to remind employers that the provisions of California's state wage and hour laws, even when facially very similar to provisions in federal law and even when they expressly refer to federal regulations, are likely to be interpreted differently by California courts and the California Division of Labor Standards Enforcement.