Overtime Lawyers Explain Misclassification of Assistant Manager Positions as Exempt from Overtime Pay
Many companies employ assistant managers with an “exempt” job classification in order to staff additional employees without paying overtime wages. With companies under constant pressure to find cost savings, and in a job market still rebounding in many sectors, the practice remains rampant–and takes away wages that many of these employees are entitled under federal law to earn. Misclassified assistant managers have a right to recover the unpaid overtime wages they should have received (potentially double) and should seek the counsel of overtime lawyers.
Who Is Legally Exempt
The Department of Labor defines who is exempt in an executive or administrative position based on a combination of the salary and the duties performed. If an assistant manager is paid at least $455* ($684 as of 1/1/2020) per week in salary, he or she can be classified as exempt as long as the duties performed fall within the definition of management, including all of the following:
- supervision of two or more full-time equivalent employees;
- primary duty of managing all or part of the enterprise; and
- either authority to hire or fire employees, or meaningful input into the decision to hire or fire employees.
Or if their duties are administrative, including all of the following:
- primary duty of performing office or non-manual work directly related to the management or general business operations of the employer or the employer’s customers; and
- primary duty includes the exercise of discretion and independent judgment with respect to important business decisions.
If these duties tests are not met, the employee should not be classified as exempt. Further, the “primary duty” requirement means that is the most important part of the employee’s job, but not necessarily what takes most of their time. The Department of Labor recognizes that this is a question whose answer depends on the facts of a given employment situation. Management, though, is defined based on duties of supervision, organization, budgeting, scheduling, and other aspects of running a department or organization, rather than performing day-to-day work there.
*Note: The Obama Administration increased the minimum “exempt” salary amount to $47,476 effective 12/1/16 but the increase was blocked by a court ruling. Instead, the Trump Administration only increased the minimum “exempt” salary to $35,568 per year as of 1/1/2020. Please see this page for the latest updates.
How Assistant Managers Fit In
When companies hire assistant managers, they use the title to refer to many different kinds of work. Some of these certainly do qualify as “management” under the Department of Labor standards, but others fall far short. Companies often define these positions internally as exempt because they can achieve significant cost savings. A single assistant manager can work 50 or 60 hours per week, allowing the company to avoid hiring one or two part-time employees. It saves onboarding and training costs, supported on the back of one person who is paid a set salary (as little as $455 per week up to 12/31/2019; $684 per week as of 1/1/2020) and no overtime pay for that work.
For the company, this practice risks litigation, but the risk is frequently worth the significant cost savings. Companies often assign some managerial tasks to assistant managers and even describe the duties in company literature as managerial. The question is whether this applies in practice. If you are spending most of your time doing the same work as your non-exempt staff, without actual authority over other employees or over company scheduling or operations, you may not be properly classified as exempt (ie. misclassified as exempt)– and entitled to recover back pay.
If you’re not careful, you could spend years working for less pay than you’re legally entitled to. When employees realize that pay practices may be wrong, the only way it changes is if they step up and do something. Do your homework and find out how your employer is classifying you. Keep track of the hours you work, and if you don’t meet all of the qualifications for exemption, speak up, and seek legal help if your employer won’t agree to fully compensate you.
If you are currently, or have been within the past few years, in an assistant manager position, paid a salary, and worked over 40 hours per week, you may have been misclassified and, as a result, entitled to compensation for unpaid overtime wages. Contact our firm immediately for a free and confidential case review and consultation from our overtime lawyers. Please use the form on the right side of this page or call us toll-free 24 hours a day at (866) 559-0400.