Managers Are Not Always Exempt from Overtime Pay

To determine whether an employee is exempt from overtime, the law requires more than an examination of the employee’s title. Thus, a manager is not automatically exempt from overtime pay.

California has been hit particularly hard by the current economic slow-down. The most recent unemployment rates in the state are hovering around 11% according to the US Department of Labor. In this tough economy, employers are doing whatever they can to cut expenses and meet bottom lines. For some employers, this includes lay-offs, hiring freezes, cutting back on benefits and requiring employees

The reduction in workforce can mean more work for employees who remain on-the-job. For those in managerial positions, this can result in increased job duties, longer working hours and less compensation. It can also result in managers doing the work of lower level employees who are laid off as part of a reduction in force.

Managers generally are exempt from overtime compensation under state and federal wage and hour laws. However, it is important to remember that it is job duties and not job titles that determine whether or not an employee actually is exempt from this important source of increased compensation.

Those currently in managerial positions should examine their day-to-day job duties and determine whether they now are spending a majority of their time managing others or performing the same tasks as those they supervise. Even though employees may have started their jobs as exempt, this doesn’t mean their status cannot change. Employees who once may not have been eligible to receive overtime pay may be surprised to discover they now are entitled to receive time and one-half and, in some cases, double time for hours worked in excess of eight hours in a day or 40 hours in a week.