Misclassification Claims: Employers Cheating Employees Out of Hard Earned Overtime Wages

Just because your employer pays you a fixed salary, doesn’t mean that you’re not entitled to additional compensation for all hours your work over 40 in a workweek.  Under the Fair Labor Standards Act (or “FLSA”), all employees are entitled to overtime compensation at time-and-one-half their regular hourly rates of pay unless the employee qualifies for one of the FLSA’s exemptions.  Someone who falls under one of these exemptions is considered an “exempt employee.”  However, employers frequently “misclassify” their employees as exempt and pay them only a fixed salary.  If you have been misclassified as exempt, the law allows you to seek unpaid overtime wages from your current or former employer as long as you earned those wages within the past three years.

Although there are several exemptions under the FLSA, the most commonly misapplied is the Executive Exemption (sometimes referred to as the managerial exemption).  To fall under this exemption: (1) you must be paid a salary of at least $455 per week; (2) your primary duty is actually managing the business and making executive decisions; (3) you regularly direct the work of at least two or more full-time employees; and (4) you have the authority and discretion to hire or fire other employees on your own.   You must fully satisfy all of these elements to actually be exempt from the FLSA’s overtime provisions.  Frequently, assistant managers and other “intermediate managers” or team leads fail on one or more of these elements and are misclassified by their employers as exempt from overtime pay.

Typically, assistant managers do not spend the majority of their day managing a business and making executive decisions. Instead, in the retail context for example, assistant managers walk the store floor helping customers, making sales, cleaning up and jumping on the teller line whenever necessary.  If this is how you spend the majority of your day, you’re likely a non-exempt employee and entitled to overtime pay.   It is the employer’s burden to prove each element of the exemption.  Primary duty is often evaluated based upon how an employee spends the overwhelming amount of their working time.  Assistant managers who spend their time doing exactly the same things as those titled “beneath them” may have claims for unpaid overtime wages.   The failure of the employer to have any time records will not preclude damages from being calculations.   Thus, if you think you have been misclassified, it’s best to consult with an attorney immediately so that you don’t miss your opportunity to collect wages you’ve already earned as there are deadlines within which such actions need to be brought. If you know someone who may have been misclassified as an exempt employee, the Shavitz Law Group is always available to provide a no-obligation free consultation.

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