Many businesses pay a salary to their assistant-manager-level employees without paying them overtime and without considering whether they truly qualify for the executive exemption.
Misclassifying assistant and associate managers
In order to qualify for the executive exemption, an assistant or associate manager must be paid on a salary basis at a rate of at least $455* ($684 as of 1/1/20) per week. It is important to remember that job duties, rather than job titles, matter most when assessing overtime wages. The employee must meet each of the following three tests:
- primary duty is management of the enterprise or of a customarily recognized department or subdivision;
- customarily and regularly direct the work of two or more other full-time employees or the equivalent; and
- have the authority to hire or fire, or make suggestions and recommendations as to hiring, firing, advancing, promotions or other status changes that are given particular weight.
For example, if you have a store that regularly has a manager, assistant manager and a few hourly employees on duty, it is unlikely that both the manager and assistant manager will qualify for the exemption. With respect to hiring and firing decisions or recommendations, if assistant managers have that authority it should be included in their job descriptions in an effort to prevent later disputes over the exemption.
* The Department of Labor under the Obama Administration increased this salary amount to $913 per week effective 12/1/2016; however, this increase was blocked by a court ruling. Instead, the Trump Administration only increased the salary amount to $684 per week effective 1/1/2020. Please see this page for the latest updates.
Duties of of the assistant Manager determine exempt or nonexempt status
What are the facts regarding your job duties? These questions can help determine the proper exempt or nonexempt status in your particular case.
- If you work in a retail or service industry, is at least 60% of your time spent performing management or supervisory duties? Generally, janitorial duties, cash register duties, preparing food orders, covering for absent non-managers, answering the phone or stocking shelves does not qualify as managerial duties.
- Do you perform the same duties as other employees, but because of your “title” work 50, 60 or even 80 hours a week without overtime compensation?
- Do two or more full time employees report to you for work assignments and oversight? Do you assign and supervise their daily tasks? Are they answerable to you? If so, you are likely exempt from overtime wages.
- How are you paid? Hourly employees are not exempt from overtime pay if your hours exceed 40 in a work week, regardless of management duties or title.
- Are your wages docked if you miss part of a work day? If so, this is not consistent with the status as a salaried employee and you are entitled to overtime.
- Although many assistant managers will qualify for the exemption, many others will not, and each employee must be reviewed on an individual basis
It is illegal to intentionally misclassify assistant managers and deny overtime wages
Attempting to avoid overtime pay is a practice too commonly implemented by employers in various industries including retail and wholesale. In short, nonexempt employees deserve and are entitled to overtime pay under the Fair Labor Standards Act (FLSA). Assistant managers who primarily perform non-managerial job duties are entitled to 1.5 times their regular rate for every hour worked in excess of 40 during a single workweek. Again, overtime exemption status depends on job duties rather than job titles, which is why it is important for assistant managers to understand their rights.
Are you an assistant manager who has been denied overtime? Know your rights! For employees who have been misclassified, help is available. Contact us immediately to assess your particular situation. The Lore Law Firm helps clients determine if an unpaid overtime lawsuit applies. The recovery of back pay and unpaid overtime wages can mean the world to hard working employees.
The courts rule in favor of overtime of retail assistant managers
You are not alone. Numerous unpaid overtime lawsuits have been filed on behalf of assistant store managers. Following are examples:
- In 2008, Fastenal Co. OF Minnesota agreed to pay $10 million to settle a class action lawsuit brought by former improperly classified assistant general managers who claimed they were denied pay for overtime and breaks.
- In 2009, BJ’s Wholesale Club reached a $9.3 million settlement with plaintiffs. In an unpaid overtime lawsuit, nearly 1,500 current and former mid-level managers were claimed to be misclassified as exempt from overtime pay.
- In a 2010 unpaid overtime lawsuit filed against Home Depot, plaintiffs in New York alleged that assistant managers in an eight-week training period were misclassified as exempt and worked in excess of 40 hours per workweek.
- In 2010, Staples Inc. agreed to a global settlement of 13 employment lawsuits involving 5000 current and former assistant store managers seeking overtime compensation for an amount of $42 million.
- Most recently in July 2012, a wage and hour complaint against Best Buy Stores alleged the wrongful exempt classification assistant store managers in California, who seek back and overtime wages.
Know Your FLSA Overtime Rights!
Are your rights under the FLSA being violated? Have you been robbed of overtime? Contact us immediately for help. The Lore Law Firm defends and protects the rights of assistant and associate managers and provides a free consultation.