There is an epidemic of companies who offer prospective or current employees a “Manager” position to avoid paying them overtime wages that the employers are legally obligated to pay the workers. Intentional job misclassification to avoid paying legal wages is constructive wage theft.
The Federal Fair Labor Standards Act (FLSA), its counterpart the Federal Code of Regulations and New Jersey Wage and Hour Law which incorporates much of the FLSA, define the circumstances by which employees are exempt from the right to receive overtime payments.
Congress enacted the FLSA to eliminate both “substandard wages” and “oppressive working hours”. If you think your employer is depriving you of overtime hourly payment, you should contact this office for a free consultation. I have represented private and public employees who suffered from employer wage theft as a result of their being misclassified and was successful in recovering financial compensation for their lost wages.
According to the FLSA, an employer does not have to pay a worker designated as “Manager” who has certain duties and who earns over a certain statutorily required weekly amount, any overtime wages for hours worked over 40 a week, because such a “Manager” is considered an exempt employee. Such an employee is not entitled to overtime wages and such a “Manager” is only paid a set salary. Unsavory employers will pay a small amount over the statutorily required minimum salary rate required for an employee to be “exempt” from overtime pay, and slap on a fake “Manager” title to deprive the worker of his rightful legal earnings.
Examples of Contrived Fake Manager Titles
By way of example only, a contrived fake manager title could be a “Filing Manager” title given to a office clerk with no discriminatory judgment as to the running of the operation and no supervision over other employees; or a “Booking Manager” title given to a worker who merely logs reservations; or a store customer-greeter, “Good Will Manager” title give to an employee who works welcoming customers as they enter a store. According to FLSA regulations, workers who are not overtime “exempt” workers, are legally entitled to not only the minimum wage but also time and half pay for all hours over 40 hours a week.
Contrived “Manager” titles do not permit an employer to cheat employees out of overtime wages. An employee entitled “Manager” may nevertheless be entitled to overtime payments if certain criteria are met.
Tests for Overtime Exemption Criteria: A Job Duties Test and Salary Threshold Test
There Is a Required Minimum Salary Threshold and a Duties Test for an employee given a job title of “Manager” for the employer to be able to legally pay them a set salary with no overtime wages. Under the Federal Code of Regulations, a “Manager “must pass both these tests, irrespective of whether the employer classifies the Manager as holding an “Administrative” or “Executive” position. You may read more on “Administrators” and overtime wages here.
The Minimum Salary Threshold Test
The Federal Code of Regulations defines the limits of who is exempt from receiving overtime wages as a manager holding an “Executive” position. Under 541.100, under the general rule for executive employees, the term “employee employed in a bona fide executive capacity” in section 13(a)(1) of the Act shall mean any employee:
Compensated on a salary basis pursuant to § 541.600 at a rate of not less than $684 per week (or $455 per week if employed in the Commonwealth of the Northern Mariana Islands, Guam, Puerto Rico, or the U.S. Virgin Islands by employers other than the Federal government, or $380 per week if employed in American Samoa by employers other than the Federal government), exclusive of board, lodging or other facilities;
The Basic Duties Test Has Three Components Listed in CFR:
An Executive “Manager” must be an employee whose primary duty is management of the enterprise in which the employee is employed or of a customarily recognized department or subdivision of the enterprise.
The employee must customarily and regularly direct the work of two or more other full-time employees or their equivalent.
The employee must have the authority to hire or fire other employees or whose suggestions and recommendations as to the hiring, firing, advancement, promotion or any other change of status of other employees are given particular weight.
Further Examples of Management Activities
Further examples of what comprises a true manager’s duties which would exempt one from receiving overtime wages are found in in the Federal Code of Regulations (CFR), 29 CFR 541.102 Management. It states, generally, “management” includes, but is not limited to, activities such as:
Interviewing, selecting, and training of employees;
Setting and adjusting their rates of pay and hours of work;
Directing the work of employees;
Maintaining production or sales records for use in supervision or control;
Appraising employees’ productivity and efficiency for the purpose of recommending promotions or other changes in status;
Handling employee complaints and grievances;
Disciplining employees;
Planning the work;
Determining the techniques to be used;
Apportioning the work among the employees;
Determining the type of materials, supplies, machinery, equipment or tools to be used or merchandise to be bought, stocked and sold;
Controlling the flow and distribution of materials or merchandise and supplies;
Providing for the safety and security of the employees or the property;
Planning and controlling the budget; and
Monitoring or implementing legal compliance measures.
What Is Meant by “Directing” Work of Other Employees
The CFR gives further explanation as to what is considered as to directing the work of other employees. It states under § 541.104, Two or more other employees:
(a) To qualify as an exempt executive under § 541.100, the employee must customarily and regularly direct the work of two or more other employees. The phrase “two or more other employees” means two full-time employees or their equivalent. One full-time and two half-time employees, for example, are equivalent to two full-time employees. Four half-time employees are also equivalent.
(b) The supervision can be distributed among two, three or more employees, but each such employee must customarily and regularly direct the work of two or more other full-time employees or the equivalent. Thus, for example, a department with five full-time nonexempt workers may have up to two exempt supervisors if each such supervisor customarily and regularly directs the work of two of those workers.
(c) An employee who merely assists the manager of a particular department and supervises two or more employees only in the actual manager’s absence does not meet this requirement.
(d) Hours worked by an employee cannot be credited more than once for different executives. Thus, a shared responsibility for the supervision of the same two employees in the same department does not satisfy this requirement. However, a full-time employee who works four hours for one supervisor and four hours for a different supervisor, for example, can be credited as a half-time employee for both supervisors.
If You Quit Your Job, You May Lose Right to Prevail in a Lawsuit
If you are thinking of quitting, or think you will be fired, you should contact this office immediately for a free consultation to discuss your options in the safest way for you. In many instances of discrimination, if you quit your job, you may lose right to prevail in a lawsuit unless you first take certain legally required measures to preserve your job while you are still employed.
Let Me Fight for You
I am successful in bringing employee lawsuits against governmental entities and private employers and recovering money for victims of illegal payment under wage and hour laws, retaliation and other discrimination. If you have been fired, not had your contract renewed, think you are not being paid your full wages, or being pushed out of your job or retaliated against, you should contact this office immediately for a free consultation.
Hope A. Lang, Attorney at Law represents workers throughout the entire state, including Hackensack, Jersey City, Newark, Irvington, Orange, East Orange, Trenton, Paterson, Montclair, Elizabeth, North Brunswick, Cherry Hill, Vineland, Union, Plainfield, Hamilton Township, Lakewood, Edison, Parsippany-Troy Hills, Franklin, Lakewood, and in every NJ County, including Bergen, Hudson, Middlesex, Essex, Monmouth, Somerset, Ocean, Union, Camden, Passaic, Morris, Gloucester, Atlantic, Burlington, Camden Counties.