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No, they can't. They can increase your salary so you meet the new threshhold for exempt employees, or they can let you make gifts/baked goods during your normal shift, or they can pay you overtime for all hours over 40/week, including time spent making baked goods or other gifts. Those are their only options. They also cannot legally terminate you for refusing to work for free, because that would be a violation of federal law. This law was changed to help stop employers from taking advantage of employees. Telling you to work for free is illegal. If you can't work this out, you can file a Complaint with the US Department of Labor.
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