Employers are generally required to pay employees minimum wage for all hours worked and overtime pay for all hours worked over 40 hours each workweek pursuant to the Fair Labor Standards Act (the “FLSA”). Overtime is defined as one and one-half times the regular rate of the employee’s pay.
However, the FLSA provides certain exemptions to the minimum wage and overtime requirements, including under what is known as the executive employee exemption. This exemption is sometimes called the manager, or management exemption, although it applies to more job titles/categories than just managers.
Ohio and Federal law do not permit an employer to fail to pay minimum wage and overtime just because the employer calls certain employees managers or supervisors. This is especially true when the “manager” has no actual control of the employees they supervise, spends the vast majority of their time performing manual labor, or has little or no control over who is working under them – such as no actual ability to supervise, discipline and/or terminate workers. If all decisions of the “manager” (or “assistant manager”) come from above, the employee may be misclassified and entitled to overtime and minimum wage. The manager must also direct the work of at least two or more other full-time employees, or their equivalent (such as four part-time employees).
It is also common for employers to pay “managers” an hourly rate but with no overtime. This violates the FLSA, because the employee must be paid on a “salary basis” of not less than $455 per week. A “salary basis” means that the employee must receive a predetermined amount each pay period, and this amount cannot be reduced because of variations in quantity or quality of work. If the employer makes deductions from the “salary” for absences less than a day then the employee may be misclassified and entitled to overtime compensation and minimum wage.
In sum, under the FLSA, in order for an employee to qualify as an executive employee, the employee must:
(1) be compensated on a salary basis at a rate not less than $455 per week; (2) customarily and regularly direct the work of at least two or more other full-time employees; (3) have a primary duty of managing the enterprise (or a recognized department or subdivision thereof); (4) have authority over the employees he/she supervises, such as selecting and terminating employees, or the executive’s suggestions are given particular weight.
If an employee does not meet each of these requirements, the employee may be misclassified and entitled to unpaid back pay, liquidated damages, costs and attorney fees.
If you have not been paid for all time worked Attorney Kevin M. McDermott II can help. Feel free to call McDermott Law LLC at (216) 367-9181 for a Free Consultation and to discuss your options.