In the U.S., there are two major classifications of employees. Exempt and non-exempt. The exemption referred to relates to whether the employee is exempt from federal wage and hour laws dealing with overtime pay under the Fair Labor Standards Act (FLSA).
For many years, the wage and hour determinations were generally fairly easy to make. Managers, executives and professionals, like attorneys and accountants would be exempt, and they were paid a salary. The rest of the staff of most companies was made up of non-exempt workers, who would be paid by the hour.
In many retail businesses, however, the difference between a “managers” and an hourly worker has been gradually eroded to where there is practically no difference. They have very little authority or autonomy, often being required to follow detailed instructions from their corporate headquarters.
They may not have any hiring authority. But, because they are misclassified as some type of “manager,” the employer can demand they work many hours beyond 40 every week, and pay them nothing.
One clue that there is potential misclassification is when the manager is earning less per hour, factoring in their uncompensated overtime hours, than their hourly co-workers.
This week, several former Jimmy John’s employees filed a class-action lawsuit, alleging that company has engaged in this illegal employment practice. They claimed they worked 50 hours per week as “assistant store managers,” and their primary duties were similar to those of non-exempt employees.
Class actions provide one method of obtaining compensation for these types of wage and hour violations, because, due to the low pay these workers receive, an individual lawsuit would be prohibitively expensive.
Legalnewsline.com, “Former Jimmy John’s employees file class action, seek overtime pay,” Localllabs News Service, January 8, 2014