When Managers May be Exempt from Overtime Pay Laws
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What to Know About Overtime Exemptions for Managers

Posted on behalf of Arnold Law Firm on July 6, 2022 in Wage and Hour. Updated on June 2, 2023

manager working late in officeWhen an employee has the word “manager” or “supervisor” in his or her title, the company he or she works for may try to make the person work longer hours without overtime pay. The company will likely use the excuse that as a manager the employee is exempt from overtime pay. However, this may not always be true.

If you have reason to believe you are overtime-eligible and worked more than 40 hours in a week but did not receive one-and-a-half times your hourly rate of pay for those hours, you may be able to take legal action to recover unpaid overtime.

Our wage and hour attorneys in Sacramento are prepared to confidentially review your claim during a free consultation. We can determine if you may have been misclassified as overtime exempt and discuss your options moving forward. There is no obligation to take legal action and there are no upfront fees, so there is no risk to you in talking to us.

Are Managers Always Exempt from Overtime Pay?

An employee may receive a salary, have a managerial title and be paid over $100,000 a year, but that does not necessarily mean he or she is exempt from overtime pay.

To avoid paying certain employees overtime wages, companies might try to argue that your position as a manager, lead or director makes you exempt, but that is simply not true. For employees to be exempt from overtime pay, their employee duties must fit certain criteria. Then and only then can you be considered overtime exempt.

Companies that deny overtime compensation to employees who should receive overtime pay can be held accountable and made to pay unpaid wages and other damages.

Criteria For Overtime Exemptions for Managers

To be exempt from overtime pay as a manager, your position must involve:

  • Directing two or more subordinates in one department
  • Regularly exercising discretionary power
  • Being able to hire and fire subordinates
  • Earning a monthly wage equal to at least two times the state minimum
  • Spend more than 50 percent of time directing the work of subordinates

Managers who spend a majority of their workday completing the same tasks as their subordinates may not meet the criteria for overtime pay exemption. Therefore, an employee who is considered a part-time manager is not exempt from being paid overtime.

The Fair Labor Standards Act (FLSA) lists some of the activities commonly associated with being a manager, including:

  • Assessing productivity
  • Controlling budgets
  • Keeping sales records
  • Training employees
  • Determining the types of materials that need to be used to do work

What is the Criteria for Executive Exemption?

Most executives are considered exempt employees. However, there are criteria for this exemption, and these criteria are meant to prevent companies from labeling certain employees as executives as a workaround to paying them overtime when they are expected to work long hours.

For an employee to legally qualify as an exempt executive, he or she must:

  • Be compensated on a salary that is no less than $684 per week
  • Manage the enterprise or manage a department or subdivision that is customarily recognized as part of the enterprise
  • Customarily and regularly direct the work of two or more full-time employees or their equivalent
  • Have the authority to hire, fire or promote employees

As labor shortages continue to disrupt California’s workforce and economy, employees in managerial or executive positions need to evaluate the work they are being asked to do to ensure they are being paid fairly.

What Steps Can I Take to Protect My Right to Overtime Pay?

If your employer classifies you as an exempt employee, yet you are expected to complete tasks that do not qualify as exempt work, it may be a good idea to take these steps to protect your right to overtime pay:

  • Keep track of all the hours you work on a task outside of the office/place of employment
  • Write down the length of phone calls with your employer/coworkers that take place after hours
  • Check/track your work computer’s login times
  • Check work emails for time and date stamps
  • Look at expense report sheets to see the amount of time you spent traveling for work
  • Call a lawyer for help

The law states you can provide a reasonable estimate of hours you worked in case you have not taken the time to write down or log all the late-night phone calls or logins to your work laptop.

Remember that if you are classified as an exempt manager or executive, yet spend more than half your time doing the same job as your subordinates, your employer cannot refuse to pay you overtime.

We Are Ready to Help You Seek Unpaid Wages. Call Today

If you believe you have been incorrectly denied overtime pay due to your title, you may be able to pursue compensation from your employer.

Let our attorneys review your claim. The consultation is free and confidential, and there is no obligation to take legal action.

Call 916-777-7777 to learn more.