Sneaky Tactic to Avoid Paying Overtime: Make Everyone a Manager
What employees need to know about misclassification
Normally you’d think that a promotion would mean a bigger paycheck. However, as some employees at a major national retailer recently found out, that’s not always the case.
In fact, these workers allege that their promotions meant that they made less money. They claim that their employer promoted them to management-level positions to avoid paying overtime.
Let’s take a look at what happened in this case, and then discuss what workers need to know about exempt and non-exempt job classifications.
Manager in Name Only
John Bouchard was hired as an hourly sales associate for the Dick’s Sporting Goods chain, but he didn’t stay in that position long. He was promoted to hardlines manager, which was considered an assistant manager position.
But Bouchard found that his promotion wasn’t quite the “step up” that he had hoped.
As an assistant manager, Bouchard claims that he was required to work about 60 hours per week. However, his job duties differed little from hourly employees. And despite his new title, Bouchard had no authority to hire, fire, supervise, discipline, or delegate work to other staffers.
The major change that came with his promotion, says Bouchard, was the inability to collect overtime.
Bouchard spoke to an attorney. He sued the company for overtime violations and for misclassifying him under the Fair Labor Standards Act (FLSA).
It turns out that Bouchard wasn’t the only Dick’s employee facing this situation. Other Dick’s staffers from around the country were also pursuing legal action against the company. Several class-action suits were being proposed. The cases were conditionally certified as a collective-action suit.
Over two thousand assistant managers came forward to allege that the company had cheated them out of overtime pay.
Dick’s decided to settle the case rather than going to the time and expense of litigating the matter in court. The company has filed court documents agreeing to pay up to $10 million to settle claims by 2,200 assistant managers in multiple states.
The settlement has yet to be approved by the court, but attorneys on both sides expect that it will be. A hearing is set for April 1.
Have You Been Unfairly Denied Overtime?
Most people are aware of the terms exempt and non-exempt – meaning “exempt from overtime” or “non-exempt from overtime.”
However, many employees are not aware of how these job classifications are determined under the FLSA.
The most important thing to remember is that job titles alone are not enough to classify employees as exempt or non-exempt. Rather, the FLSA states that classifications must be determined based on the terms and conditions of employment, with specific emphasis on job duties that staffers perform.
In addition, the FLSA spells out several exceptions to the exempt/non-exempt classifications.
Issues involving job classifications can be extremely complicated, and often require a thorough examination of a person’s particular circumstances.
If you believe that you’ve been unlawfully denied overtime, it’s a good idea to speak to an employment law attorney who was experience dealing with FLSA issues.
Call or email us today to discuss your unique situation.