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When Is A Manager A Manager And Not An Hourly Worker

Jul 14, 2008
Many employers attempt to avoid having to comply with federal and state laws by mis- classifying their employees. Instead of giving them their regular titles they are promoted in title to managers, supervisors, and assistant managers. They then pay them salaries instead of hourly rates and pay no overtime for hours worked in excess of 40 hours per week. Human resource managers should be keenly aware of this as many large business have been successfully sued.

A job title of manager does not mean the employer is not liable or that the employee is not entitled to overtime pay. What matter is whether or not the employee is actually still an hourly employee or if the employee is a manager or supervisor.

Management or supervision of other employees means that two or more full time employees report to the manager or supervisor for work assignments and oversight of their everyday tasks. You also have to consider whether or not the employee gets a regular salary regardless of the hours actually worked or would the employee be paid less for working fewer than 40 hours per week.

You also have to determine what percentage of the time is actually spent managing or supervising. Duties that are substantially the same as an hourly employee are not management or supervisory tasks. The manager or supervisor must spend about 60 to 80% of his or her time in management duties. Often the opposite is true, the supervisor or manager is asked to continue doing his work and to spent about 20% of his time in management activities. In more severe cases the employee's duties are the same except for perhaps an additional task such as opening or closing. Some of these managers or supervisors are also required to fill in when an employee does not show up. If this occurs regularly the manager or supervisor spends more than half of his time doing the same duties as an hourly employee, but
without the benefit of overtime pay.

These types of claims arise on a regular basis among even the biggest of employers. In one case the store managers at Radio Shack were deemed to be hourly employees and not managers and were awarded back pay for working overtime. In another case Wal-Mart was sued in California for allegedly failing to pay overtime. In another case in Oregon, Wal-Mart was sued and employees were awarded overtime pay.
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