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Assistant Managers and Overtime Pay – Exempt or Non-Exempt?

Workers with the title of “Assistant Manager” frequently, and rightly, ask if their job duties make them exempt from the overtime pay laws, and thus not entitled to overtime pay. Misclassification of Assistant Managers as exempt instead of non-exempt employees has been a long-running issue across almost all types of industries, and the basis of many lawsuits seeking to recover unpaid overtime and remedy wage theft. Misclassified assistant managers are often shocked to find out how much their case is worth.  

One case in point (that settled for $31.5 Million) involved a class of current and former assistant store managers of Marshalls and HomeGoods stores. As is typical of assistant manager misclassification lawsuits, the employees claimed that they were classified as exempt in an effort by the company to avoid payment for overtime, however, their day-to-day duties were not managerial and did not meet the legal requirements for being an exempt employee. The workers asserted that their primary job duties consisted of stocking shelves, folding clothes, unpacking boxes, cleaning stores and manning registers – not the management and/or supervision of other employees or store operations. 

What are Your Primary Job Duties?

Under the Fair Labor Standards Act (FLSA), certain salaried managerial/supervisory employees are not required to be paid overtime wages, and the Executive and/or Administrative exemption often apply to “Manager” and “Supervisor” positions. Performing some non-exempt work like manual labor will not necessarily invalidate an exemption, as the application of the exemption will turn upon what is determined to be the employee’s “primary duty”. The questions to ask include:

  • Do you supervise 2 or more full-time employees?
  • Can you hire and fire employees or make recommendations about hiring and firing?
  • What types of decisions are you authorized to make? 
  • To what extent are you able to exercise discretion and independent judgment in performing your job?

The following is an overview of the duties tests for the most common overtime exemptions that apply to managers / assistant managers:

Executive Exemption:

Duties:

  • The employee’s primary (principal, most important) duty must  be management of the enterprise in which the employee is employed or of a customarily recognized department or subdivision thereof;
  • The employee must customarily and regularly direct the work of two or more other full-time employees; and
  • The employee must have the authority to hire or fire other employees or their suggestions and recommendations as to the hiring, firing, advancement, promotion or any other change of status of other employees are given particular weight.

Administrative Exemption:

Duties:

  • The employee’s primary (principal, most important) duty must be the performance of office or non-manual work directly related to the management or general business operations of the employer or the employer’s customers; and
  • The employee’s primary duty includes the exercise of discretion and independent judgment with respect to matters of significance. 

Are You Paid a Salary, and Is It Enough? 

In addition to the above job duties requirement, in order to qualify as an exempt employee, the worker’s pay must also meet the requirements of these exemptions. 

The executive and administrative overtime exemptions require that an employee be paid on a salary basis (not hourly or day-rate) at a rate of at least $684 per week – effective 1/1/2020. The prior salary limit was at least $455/week.  Please see this page for more details about the changes to the required minimum salary.

Payment on a salary basis on its own does not render the employee exempt from the overtime requirements of the FLSA. Exemption requires that both the salary and the duties tests be met. Also note that when state laws differ from the federal FLSA, an employer must comply with the standard most protective to employees. 

Need Help Determining If You Have Been Misclassified and Denied Overtime Pay? 

Although compliance with the wage and labor laws is technically the sole obligation of the employer, in reality, it is important for workers to familiarize themselves with federal and state wage laws in order to protect their fair pay rights. There is a lot of money at stake on this issue and you should seek guidance from an overtime pay lawyer if you have any doubt as to your rights and your employer’s compliance. 

If you review the requirements under the Executive & Administrative exemptions and your job duties or salary amount do not meet the requirements of these exemptions and you are interested in pursuing an overtime claim, please contact us for more information and a free and confidential review of your situation.