If Shakespeare’s to be believed, a rose by any other name would still smell as sweet. It’s a nice idea, but a lousy principle – especially when it comes to work. Job titles matter: they help boost your resume and show your climb up the ranks. They can also, depending on the title in question, mistakenly lead you to believe you’re not entitled to overtime pay when you actually are.
Nowhere is this more obvious than what’s known as the “executive exemption” – a snazzy name for the idea that certain workers, including those performing managerial duties, are exempt from overtime wages due to the nature of their jobs. In a perfect world, the law works because managers are typically paid better than lower-level employees and are therefore expected to work longer hours when things start to get busy. In reality, though, some companies misclassify regular employees as “managers” – and thereby take advantage of this exemption.
It’s not a good move – and it’s completely illegal.
The Executive Exemption: What’s It All Mean?
The Fair Labor Standards Act (FLSA) covers most employers in the United States and protects workers’ rights to the minimum wage and overtime pay. Some employees, based on how they are paid and the job tasks they take on, are exempt from these requirements and therefore are not entitled to extra pay when working overtime. One of these exemptions applies to executive roles (meaning any role considered to be managerial) so long as the following criteria are met:
- The employee earns a salary of at least $455 per week
- The employee’s primary duty involves managing a business, division, department, or subdivision
- The employee regularly directs (i.e., manages) at least two other full-time workers
- The employee has the authority to, or is at least involved in decisions relating to, hiring and firing, as well as promotions of other workers.
These rules are fairly specific for a reason: a role that doesn’t include such responsibilities cannot really, in the eyes of the Department of Labor, be called executive or managerial. That matters. And here’s why…
Why Would Employers Want to Call Me a Manager If I’m Not One?
Fact is, more and more companies are designating employees as managers – whether it’s assistant manager, department manager, store manager, or some variation – and then asking them to work overtime without time-and-a-half pay.
In some cases, this may be unintentional. If companies aren’t familiar with the law, they may not realize that the title of manager alone does not qualify an employee for the exemption. In other cases, lawsuits have been filed by employees whose jobs were clearly non-executive, but who were asked to work extra hours without receiving federally-protected overtime wages.
Just this month, for instance, a Barnes & Noble café manager launched a proposed class action lawsuit accusing the bookseller of classifying “managers” as exempt, salaried employees under the FLSA even though their day-to-day roles were no different than non-salaried employees.
While Barnes & Noble monitors its café staff to ensure they work no more than 40 hours per week, it relies on salaried managers to do the same work (making coffee and serving customers) while working extra hours without overtime pay, according to the suit. That might be fine if the managers really did manage things but, as the complaint says:
“The primary duties of [café managers] do not fall within any of the exemptions under federal or state overtime laws.”
The complaint also claims that Barnes & Noble has a common, nationwide policy of deliberately misclassifying café managers as exempt from federal and state wage laws. Sadly, this complaint is all too common. Companies seem to think the executive exemption to the FLSA gives them carte blanche to decide who does and doesn’t get overtime pay. The tide is slowly turning, however, as employees learn about their rights and class actions begin to put the issue in the spotlight.
Spotting the Warning Signs of Misclassification
People want promotions – and some employers may lure you in with the idea that it’s a step forward. Normally, of course, it is – but if you end up doing the same job as before, but this time without making time-and-a-half wages when you work more than 40 hours per week, something’s gone wrong.
The point is, managers can’t just be workers with a shiny new title: managers are distinct because, as the law points out, they can direct other workers, are involved in important decisions, and don’t spend the majority of their time doing the same job as regular workers. Being pulled into one business meeting a month and asked to share your thoughts does not count if you spend the rest of your time doing what you did before your “promotion.” Instead, exempt workers have a primary role of overseeing things. If most of your time is spent looking after other workers and sharing your thoughts on serious matters, then you may be a bona-fide manager and exempt from the FLSA’s overtime rules.
The takeaway? Your job duties – not your job title – determine whether you’re entitled to overtime pay. When in doubt, check out the Department of Labor’s factsheet on FLSA exemptions. Remember, if you’re working unpaid overtime, it ought to be because your job is setting you apart from regular workers. It’s great to have perks and a fancier title, but, in the end, it’s better to be paid what’s legally yours.