Alex Myers

Alex Myers of Myers & Associates will take over the legal advice column "Minding Your Business." He specializes in business law.

Dear Alex:

Our restaurant recently promoted an employee to manager. As part of the promotion she received a raise in pay, and is now paid a salary instead of hourly.

The new role also requires hours longer than she used to work, including some days exceeding eight hours per day. She told us that she expected to earn overtime for hours worked in excess of eight hours per day, but we believe she is exempt from overtime because she is a manager.

Should she be paid overtime?

Certain types of employees do not earn overtime or other wage-and-hour benefits. These employees are classified “exempt” employees. If an employee is improperly classified and paid as exempt, the employer may be required to pay back wages, taxes, interest and penalties all at once. This can become a very large amount of money in a short period of time.

Exempt employees are usually paid a salary, at least twice the minimum wage, and payment is not based on the hours worked. Exempt employees are usually professionals, executives or administrators who have a significant amount of independence in their jobs.

Exempt employees must meet both the minimum salary requirement, as well as perform the duties that the law considers executive or managerial. Unfortunately, sometimes it can be tricky to accurately identify whether an employee should be exempt or nonexempt.

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One of the jobs that can be difficult to classify is the restaurant manager.

Restaurant managers, if they are exempt, would fall within the exemption for executives and managers. The salary requirement of at least twice minimum wage is simple for the employer to figure out, but the issue of whether the employee’s duties satisfy the performance requirement can be a challenge to determine.

The employee’s title as “manager” is not the determinative factor; instead, the actual duties performed and type of work required of the manager determine whether the employee is or is not exempt.

Some of the basic requirements of an exempt manager require that the manager must supervise at least two other employees on a regular basis, and have the power to hire and fire employees, or at least have the power to recommend hiring and firing decisions.

The manager must also spend at least half of her work time engaged in managerial duties, and regularly exercise independent discretion and judgment in those management tasks. Some of these criteria are subjective, and in the case of a restaurant manager, who may spend much of her time on the restaurant floor assisting service staff, the line gets blurry.

Whether your manager’s specific circumstances meet the exemption requirements depends heavily on how much authority and independence she is given in managerial decision making, and how her time at work is spent.

Be wary of relying solely upon her job title as “manager” in your classification decisions.

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Alex Myers is a business attorney with Myers & Associates in Napa. Reach him at alex@myers-associates.com or 707-257-1185. The information provided in this column is not intended as legal advice, nor does it create an attorney-client relationship. The information is not a comprehensive analysis of the law — if you need legal advice, contact an attorney.


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