$1 Billion AT & T Overtime Lawsuit Highlights Increasing Risks to Employers
If a company classifies an employee as salaried or managerial, the employee is not entitled to overtime, right? Wrong. Many companies exploit a common misunderstanding that salaried managers are exempt from overtime by fraudulently labelling employees as "managerial" when they perform mostly non-managerial tasks. In these instances, the company is liable for unpaid overtime wages and an equal amount in damages.
Often, companies leave evidence of their intent to violate the FLSA, in which case a larger class can be certified, and more penalities assessed. A recent lawsuit filed by misclassified AT & T managers sheds light on the tracks a company may leave after they violate the FLSA. According to the allegations in the complaint, Bell South originally paid so-called "First Level Managers" overtime before the AT & T takeover two years ago. The only changed circumstances was AT & T's desire to avoid paying overtime to administrators - they simply changed their titles and classified the newly minted managers as exempt.
Managerial employees should assess their duties and determine if they actually perform managerial tasks, such as hiring and firing employees, rather than clerical or administrative tasks. Do not rely on your employer's classification of your FLSA status, especially in those instances where the status changes suddenly without adequate explanation.
