Managers, supervisors not automatically exempt from overtime
A group of Assistant Branch Managers, who worked for JPMorgan Chase in California, sued the bank in a class action claiming they were misclassified as exempt employees. Because of the misclassification, the employees claimed they were denied overtime payment, and they were not provided meal and rest breaks.
In order to obtain more facts about their claims, the employees paid for an online survey of assistant bank managers asking about their activities and hours worked. According to the employees, the online survey showed that assistant bank managers work nearly nine hours of overtime each week and did not receive meal breaks about 60 percent of the time. The survey also found that 95 percent of assistant bank managers reported that they spent most of their time engaged in non-exempt tasks such as being tellers and clerks.
UnderCalifornia law, employees are entitled to overtime pay for any work in excess of eight hours in one workday, or 40 hours in any one workweek, unless the employee qualifies for a legal exemption. Specifically relevant are the executive and administrative exemptions:
For executive exemption to apply, an employee must be: (1) paid at least twice the state’s minimum wage for full time employment; (2) assigned as primary function the management of the business; (3) responsible for regularly directing the work of 2 or more subordinates; (4) has the authority to hire, fire, give pay treatment or recommend such actions; (5) regularly and customarily exercises discretionary powers; and (6) devotes less than 50% of work time to non-managerial duties.
To fall under the administrative exemption, an employee must be: (1) paid at least twice the state’s minimum wage for full time employment; (2) charged with the performance of office or non-manual work directly related to management policies or general business operations; (3) regularly exercises discretionary and independent judgment; (4) regularly assists a proprietor or an executive or administrative employee; and (5) works only under general supervision on special or technical assignments and tasks.
Even if the employee performs both managerial and non-managerial tasks, California courts have ruled that employers must classify each task as either exempt or non-exempt. If non-exempt work takes up a large part of a supervisor’s time, the supervisor likely is a “nonexempt” employee, and is entitled to overtime pay.
Tasks may be “exempt” or “nonexempt” based on the purpose they serve within the organization. A task performed because it is “helpful in supervising the employees or contributes to the smooth functioning of the department” is exempt, even though the same task performed for a different, non-managerial reason would be nonexempt. For example, in a large retail establishment where the replenishing of stocks of merchandise on the sales floor is customarily assigned to a nonexempt employee, the performance of such work by the manager is nonexempt. Similarly, a manager’s participation in making sales to customers is nonexempt, unless the sales are made for supervisory training or demonstration purposes.
To resolve the claims of its assistant bank managers, JPMorgan Chase Bank NA has agreed to pay $8.3 million to an estimated 2,000 class members.
Managers, supervisors, and administrators who receive monthly salaries and are not paid overtime should evaluate the nature of their jobs. Labels or job titles alone are not enough. Some employers may use fancy job titles to avoid paying overtime. If they mostly perform non-exempt work, employees should be paid overtime. As this analysis may involve application of legal principles, these employees are well advised to inquire with an experienced employment attorney.
The Law Offices of C. Joe Sayas, Jr. welcomes inquiries about this topic. All inquiries are confidential and at no-cost. You can contact the office at (818) 291-0088 or visit www.joesayaslaw.comor our Facebook page Joe Sayas Law. [C. Joe Sayas, Jr., Esq. is an experienced trial attorney who has successfully recovered wages and other monetary damages for thousands of employees and consumers. He was named Top Labor & Employment Attorney in California by the Daily Journal, consistently selected as Super Lawyer by the Los Angeles Magazine, is the recipient of PABA’s Community Champion Award, and is aPresidential Awardee for Outstanding FilipinoOverseas in 2018.]