manager talking to employees

The overtime laws make a distinction between managers and non-managers. But the threshold set by the government to be considered a manager is fairly low, giving employers the chance to exploit the rules and assign artificial managerial titles to regular workers. This, in turn, allows employers to skirt overtime laws. Unfortunately, employers have no shortage of schemes to cheat their employees out of the pay they earn. But The Lore Law Firm is ready to stand up for you if you’re not being paid fairly.

What Is the Overtime Rule for Managers?

The Fair Labor Standards Act (FLSA) is the primary federal law concerning overtime pay in the United States. It sets the basic standards that all employers must follow. While states may offer more generous overtime rules for workers, the FLSA acts as the minimum level of protections for employees.

In general, the FLSA requires workers to be paid overtime (time and a half) for all hours worked over 40 during a week. There are a number of exemptions to this rule, however. According to the Department of Labor, the exemptions that are most applicable to managers are the executive and administrative exemptions.

Both types of employees must be paid a salary of at least $684 per week in order for the employer to claim the exemption. There are other requirements that must be met. With respect to managers, the following criteria are most relevant:

  • The employee’s primary (principal, most important) duty must be the management of a customarily recognized department or subdivision;
  • The employee must customarily and regularly direct the work of at least two or more other full-time employees or their equivalent; and
  • The employee must have the authority to hire or fire other employees, or the employee’s recommendations must be given particular weight.

How Employers Use Titles to Violate Overtime Pay Laws

Employers deceptively assign manager titles to employees who may meet the salary requirements but fail the other ones. That means, for instance, attaching the manager label to employees who do not “customarily and regularly direct the work” of other employees. A receptionist may be given the title “front desk manager” or a carpet cleaner may be called a “carpet shampoo manager,” but these titles ultimately don’t mean much, and certainly do not change the job from non-exempt to exempt.

The Family Dollar chain landed in hot water for this practice. A disproportionate number of employees were called “store managers.” Although these “managers” occasionally performed managerial duties, they spent 60-90 hours per week carrying out manual labor tasks such as stocking shelves and cleaning bathrooms. In a class action lawsuit, plaintiffs claimed they only spent 5-10 hours per week managing anything. The court determined that the manager’s job titles were fictional because they did not accurately describe the employees’ daily routines. The court ordered $35 million in unpaid overtime pay to 1,424 employees.

Employees may believe they are being respected and treated well by being labeled managers when in reality they are merely being exploited and cheated out of their wages. Simply calling an employee a manager is not enough to make it so, even if the requisite salary threshold is met. The Department of Labor makes it clear: “Exemption requires that both the salary and the duties tests be met.” In other words, the employee in question must be a bona fide manager with real managerial duties and responsibilities.

Do you have questions about your job title and whether you’re entitled to overtime? Do you work long hours every week, or spend considerable time carrying out manual labor tasks, with very little managerial work? If so, you may be entitled to overtime pay. Connect with The Lore Law Firm by completing our free and confidential client intake form so we can review your situation today.

Michael Lore is the founder of The Lore Law Firm. For over 25 years, his law practice and experience extend from representing individuals in all aspects of labor & employment law, with a concentration in class and collective actions seeking to recover unpaid back overtime wages, to matters involving executive severance negotiations, non-compete provisions and serious personal injury (work and non-work related). He has handled matters both in the state and federal courts nationwide as well as via related administrative agencies. If you have any questions about this article, you can contact Michael by using our chat functionality.