Best Ohio Overtime Attorney Answer: If my title is “manager,” does that mean I shouldn’t be paid overtime? How should my employer determine whether I should be paid overtime? Does my job description matter in determining whether I’m exempt or should my actual duties be evaluated?
As our wage and hour attorneys frequently blog about, the Fair Labor Standards Act (“FLSA”) requires that covered, nonexempt employees be paid at least the federal minimum wage of $7.25 an hour, plus time and one-half their regularly hourly rates for all hours worked over 40 in a given workweek.
As overtime law lawyers, we frequently encounter employees who have been misclassified by their employer as exempt and, as such, have been denied their rightful overtime pay. The most commonly encountered exemptions in FLSA overtime cases are the professional, administrative, and executive exemptions, each of which requires a fact intensive inquiry into the actual job duties of the employee.
For example, it isn’t enough that an employee be labeled as an executive to be covered by the executive exemption. Rather, the employee must be primarily engaged in management, either of the business or one of its divisions, must direct the work of two or more employees, and must have the ability to hire or fire employees, or at least must have significant input into hiring and firing. To fall within the professional exemption, the employee’s work must be primarily intellectual in nature, requiring an advanced knowledge in a field of science or learning, which is typically the result of a long course of study. The FLSA’s Administrative exemption applies when the employee’s primary duties consist of office or non-manual work, which is directly related to the management of the business and which involves the exercise of discretion and independent judgment. Because misclassification is a frequent trick for employers to avoid overtime pay, our wage theft lawyers have blogged about this issue often. (See Top Overtime Wage Attorney Reply: Am I Entitled To Overtime If I’m A Manager In Name Only?; As an Assistant Manager Should I Get Overtime Pay? I Need A Lawyer!; Overtime Attorney Top Answer: I’m A Manager. Can I Get Paid For Overtime Hours?; and Should I Be Paid Overtime Even If I Have The Title Manger? Top Ohio Wage and Hour Lawyer Reply!).
Central to the analysis of each of the above exemptions is an inquiry into the employee’s actual job duties. A recent case out of the U.S. District Court for Colorado makes clear that reliance only on job titles alone, or even job descriptions, when classifying employees for the purposes of the FLSA is insufficient.
In Boden v. HMSHost Corp., salaried assistant managers of a company that operates food and beverage concessions in malls and airports alleged that they routinely worked in excess of forty hours per workweek and rarely engaged in the sort of job duties that would exempt them from the overtime requirements of the FLSA. Because more than two years had elapsed between the time that either of the two named plaintiffs last worked for the company and the filing of the lawsuit, the only way that the plaintiffs could state a valid claim was if they could establish that the company’s violation of the FLSA was willful. This is because the FLSA generally has a two year statute of limitations. Where a company willfully violates the FLSA, however, the statute of limitations is extended to three years.
To show that an employer willfully misclassified employees for the purposes of the FLSA, an employee must show that the employer either knew that it misclassified the employees or that the employer showed a reckless disregard as to whether the employees were correctly classified. If an employee can establish that the employer should have inquired further into whether it correctly classified employees and the employer failed to so inquire, a court will find that the employer acted in reckless disregard.
The United States District Court for the District of Colorado set the standard as follows:
To show willfulness, a plaintiff must allege facts showing that “the employer either knew or showed reckless disregard for the matter of whether its conduct was prohibited by the statute.” McLaughlin v. Richland Shoe Co., 486 U.S. 128, 133 (1988). Although an employer’s failure to consult with counsel by itself is insufficient to show recklessness, “the court’s operative inquiry focuses on the employer’s diligence in the face of a statutory obligation.” Mumby v. Pure Energy Servs. (USA), Inc., 636 F.3d 1266, 1270 (10th Cir. 2011); see also 29 C.F.R. § 578.3 (2001) (“[A]n employer’s conduct shall be deemed to be in reckless disregard of the requirements of the Act, among other situations, if the employer should have inquired further into whether its conduct was in compliance with the Act, and failed to make adequate further inquiry.”).
Whether an FLSA violation is willful is a mixed question of law and fact, but factual issues predominate. See Pabst v. Okla. Gas & Elec. Co., 228 F.3d 1128, 1137 (10th Cir. 2000) (citation omitted). “All of the facts and circumstances surrounding the violation shall be taken into account in determining whether a violation was willful.” 29 C.F.R. § 578.3.
In finding that the employees alleged sufficient facts to support a plausible claim that HMSHost willfully violated the FLSA, the Boden court looked to the deposition of HMSHost Vice President Coleman Lauterbach. Lauterbach admitted that the company relied on job descriptions when classifying employees and never observed or investigated the work that the assistant managers actually performed. Moreover, the company never sought legal advice as to how the assistant managers should be classified.
Additionally, the plaintiffs alleged that the company intentionally underfunded the budgets for individual stores, such that if certain non-exempt tasks were to be performed at all, those tasks would need to be performed by salaried assistant managers, as there was not enough money in the budgets to pay hourly workers the necessary overtime to complete those tasks. Importantly, the court also considered the size and sophistication of the company. HMSHost employs over 20,000 workers, a great number of whom it properly classifies as non-exempt. This fact indicates that HMSHost knew the law and knew how, or should have known how, to properly classify its workers. As the Court held:
Taken together and viewed as a whole, see 29 C.F.R. § 578.3, these allegations support a reasonable inference that Defendants, as large and resourceful companies, did not use due diligence to meet their statutory obligations under the FLSA. See Morgan, 551 F.3d at 1280-81 (finding that employer’s failure to adequately study employee’s proper classification supported jury’s finding of willfulness); Stillman v. Staples, Inc., No. 07-849 (KSH), 2009 WL 1437817, at *12-13 (D. N.J. May 15, 2009) (finding the jury had sufficient evidence to conclude that employer’s one-day self-audit was insufficient to show compliance with the FLSA); Terwilliger v. Home of Hope, Inc., 21 F. Supp. 2d 1294, 1304 (N.D. Okla. 1998) (denying summary judgment because disputed facts remained about the length and type of employer’s exemption investigations); 29 C.F.R. § 578.3 (noting that an employer may recklessly disregard FLSA requirements when it fails “to make adequate further inquiry” or “should have inquired further into whether its conduct was in compliance with the Act”).
If you believe that your employer is not paying you all of your wages for all of your lawfully earned overtime compensation at a rate of one and half times your normal wages as requires under the Federal Fair Labor Standards Act or Ohio Minimum Fair Wage Standards laws or you are an nonexempt employee that has been misclassified as exempt or independent contractor, contact the attorneys at the Spitz law firm today for a free and confidential initial consultation. The wage and hour lawyers at the Spitz law firm will provide you with the best options for your overtime pay dispute situation. If you even think that you may be entitled to overtime pay that you are not being paid, call 866-797-6040.
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