Misclassified Salaried Employees

Many workers are told they are not entitled to overtime because they are paid a salary. But being paid a salary does not automatically mean an employee is exempt from overtime.

Some salaried employees are properly exempt. Others are misclassified and may be owed overtime pay when they work more than 40 hours in a workweek.

What Is Misclassification?

Misclassification occurs when an employer treats an employee as exempt from overtime even though the employee’s actual job duties do not qualify for an overtime exemption.

This often happens when employees are given titles such as:

• manager,

• assistant manager,

• supervisor,

• coordinator,

• specialist,

• administrator,

• lead,

• analyst, or

• salaried professional.

A job title alone does not determine whether an employee is entitled to overtime. The actual work performed matters.

Salary Is Only Part of the Analysis

Many employees assume that overtime rights depend only on how they are paid. But salary is usually only one part of the exemption analysis.

An employer generally must also look at what the employee actually does on the job.

For example, a salaried employee may still be entitled to overtime if most of their work is routine, closely supervised, production-based, customer-service based, manual, or controlled by detailed policies and procedures.

Common Misclassification Situations

Salaried misclassification can happen in many types of jobs, including:

• assistant managers who mostly perform hourly work;

• retail or restaurant managers with little real authority;

• office employees who process paperwork or data;

• customer service supervisors with limited decision-making power;

• call center leads or team leads who follow scripts and metrics;

• dispatchers and coordinators;

• recruiters and staffing employees;

• loan processors and claims employees;

• healthcare administrative workers; and

• employees labeled “administrative” who mainly follow established procedures.

The issue is not whether the job is important. The issue is whether the job duties meet the legal requirements for an overtime exemption.

Management Titles Can Be Misleading

One common misclassification problem involves “working managers.”

A worker may be called a manager but spend most of the day performing the same type of work as hourly employees.

Examples include:

• running a cash register,

• serving customers,

• stocking shelves,

• preparing food,

• cleaning,

• answering phones,

• handling routine paperwork,

• covering shifts, or

• performing production work.

If the employee has little real authority over hiring, firing, discipline, scheduling, pay decisions, or business operations, the management title may not be enough to avoid overtime pay.

Administrative Titles Can Be Misleading Too

Another common issue involves employees classified as “administrative.”

Not every office employee is exempt from overtime.

Employees may be misclassified if their work mainly involves:

• entering data,

• processing forms,

• following checklists,

• applying standard policies,

• answering routine questions,

• scheduling,

• preparing routine reports,

• handling customer issues within strict guidelines, or

• performing support work without meaningful independent authority.

An employee can be salaried, work in an office, and still be entitled to overtime.

Common Warning Signs

Potential warning signs of salaried misclassification include:

• being paid a salary but regularly working more than 40 hours;

• being told “salary means no overtime”;

• having a management title but little actual management authority;

• spending most of the day doing routine or manual work;

• performing the same work as hourly employees;

• having little control over hiring, firing, discipline, or scheduling;

• following detailed scripts, checklists, or procedures;

• being closely supervised;

• having limited decision-making authority; or

• working long hours without any overtime pay.

These issues often affect multiple employees with the same title or job classification.

Discuss Your Situation

Being paid a salary does not automatically eliminate overtime rights. If you were paid a salary, regularly worked more than 40 hours per week, and had limited authority or mostly routine job duties, you may have been misclassified.

If you believe you were misclassified as exempt from overtime, you may request a confidential review of your situation.