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Should Managers and Assistant Managers Be Paid Overtime?


North Carolina and Federal law requires employees to be paid overtime for each hour worked in excess of 40 in a given week. However, there are exceptions to these rules that employers often use for managers or assistant managers. Ensuring a company is properly labeling employees as exempt requires a detailed analysis into an employee’s duties, particularly for managers and assistant managers. If you are a manager or an assistant manager of a restaurant, store, or other business establishment, contact wage and hour employment attorney Karl S. Gwaltney at 919.526.0450 or at Karl S. Gwaltney represents both employers and employees with wage and hour issues throughout North Carolina.

The most commonly used exemption classification for managers and assistant managers in North Carolina is for “Executive White Collar” employees. Section 13(a)(1) of the Fair Labor Standards Act (which the North Carolina Wage and Hour Act mirrors) provides for exemptions from overtime and minimum wage requirements. Executive Employees must meet all of the following tests:

  • The employee must be compensated with a salary of at least $455 per week;
  • The employee’s primary duty must be managing the business, or managing a customarily recognized department or subdivision of the business;
  • The employee must customarily and regularly direct the work of at least two (2) employees; and
  • The employee must be able to hire and fire other employees, or recommend the hiring and firing of employees.

Managers and assistant managers can meet the “management” requirement by performing activities such as interviewing, hiring, and training employees, setting and adjusting pay schedules of employees, handing employee complaints, disciplining and firing employees, apportioning work amongst various employees, stock and shelve certain inventory, control the flow and distribution of materials or merchandise and  supplies, plan and control budgetary constraints, monitor compliance, conduct performance appraisals, promote employees, and purchase inventory and equipment.

To properly determine if a manager or assistant manager is actually exempt from minimum wage and overtime requirements requires an examination into the employee’s actual duties performed. Many employers incorrectly assume that having a title as “manager” or “assistant manager” will automatically exempt an employee from overtime or minimum wage requirements under the Fair Labor Standards Act or North Carolina Wage and Hour Act. The primary duty of a manager or assistant manager must actually include managing and exercising independent judgment and discretion.

The above activities must be the primary duty of the manager or assistant manager. Determining whether an employee’s primary duty is “management,” a court will examine all the duties of a particular employee, with an emphasis on the character of the manager’s job as a whole. A court will consider the relative importance of the exempt duties compared to non-exempt duties. A court will also consider the amount of time spent on the exempt duties compared to non-exempt duties, and the relationship between the employee’s salary and the wages (or salary) paid to other employees for non-exempt work.

For restaurant managers, there are typically four (4) primary factors to determine whether managers are exempt from overtime requirements: 1) Importance of managerial duties; 2) frequency of exercise of discretion and independent judgment; 3) relative freedom from supervision; and 4) comparative compensation to non-exempt employees.

Overtime and minimum wage laws are complex. Simply being labeled a manager or assistant manager does not automatically mean an employee is not entitled to overtime or minimum wage. If you have questions about your status as an exempt employee, contact the minimum wage and overtime compensation attorneys at Maginnis Law, PLLC. Determining whether a manager is properly exempted from overtime requirements requires a fact intensive inquiry into the actual job duties of the employee. If your employer asserts that you are a manager and does not pay you overtime or if you are wrongly denied pay from your employer, contact Raleigh unpaid wage and overtime lawyer Karl S. Gwaltney at 919.526.0450 for a free consultation regarding your rights. Maginnis Law, PLLC is a Raleigh firm handling employment cases dealing with unpaid wages and overtime throughout Wake County, Cary, Apex, Durham, Vance County, and Henderson. The firm takes certain wage and hour/overtime cases throughout North Carolina, particularly when groups of workers are involved. Contact the firm to discuss your overtime claim today or submit a confidential new case inquiry here.