Overtime: It’s the Work, Not the Title That Matters

Employers are doing more with fewer employees, which means employees are working more hours. That’s fine as long as nonexempt employees are paid overtime if they work more than 40 hours per week. If they’re misclassified as nonexempt employees, employers will owe overtime for the extra hours being worked. That could amount to big money.

In Hale v. Dolgencorp, a manager was classified as exempt. She was  paid a salary and wasn’t paid overtime. She filed suit claiming that she really wasn’t a manager and hadn’t been paid overtime for the extra 20 to 30 hours she worked per week. The employer contended that she fit within the “executive or manager” exemption of the Fair Labor Standards Act, because she, among other things, primarily managed a particular store.

The employee contended that she didn’t primarily manage the store, Rather, she stocked shelves and operated a cash register. She didn’t have the discretion required to be exampt because she couldn’t discipline or fire employees without the district manager’s approval. Moreover, the district manager gave her specific instructions on how to operate her store. When the employer asked that the case be dismissed, a federal district court in Virginia refused. Based on the facts, a reasonable jury could conclude that the employee was nonexempt and owed overtime.

Overtime litigation is hot as fire right now. Employers need to pay close attention to all employees classified as exempt, especially those who work a high number of hours every week. If the employees are misclassified, a lot of overtime will be owed, perhaps to a large number of employees. It’s not the title an employee has. It’s the kind of work she does that matters. When’s the last time an evaluation of employee duties was performed? If it’s been a long time, you really are playing with fire.

1. 

   ACU Frank says:

   November 10, 2010 at 11:07 am

   I’m fighting this battle over an outside sales rep now. Every time someone complains that his isn’t spending enough time in the office, we get once step closer to a misclassification disaster.
2. 

   Misclassified Employee says:

   November 11, 2010 at 12:27 pm

   My title was supervisor and the company claims in exempt. But I performed the same duties as the installers I supervised. We are in a class action. I’m reading a lot of misclassified of employees all over the news wire. Is the State taking a close look at these companies?
3. 

   John Phillips says:

   November 11, 2010 at 11:47 pm

   Frank,

   Thanks for your comment. Misclassification disaster sums up what we’re talking about here. Most employers face them every day, whether they know it or not. I’m sure you’ll handle yours in a way that turns disaster into proper compliance.

   John
4. 

   John Phillips says:

   November 11, 2010 at 11:49 pm

   Misclassified employee,

   Thanks for your comment. There is significant legal action involving the misclassification of employees. The federal Department of Labor is paying a lot of attention to this issue, more so than the states.

   John