Jeffrey H. Ruzal, a Member of the Firm in the Employment, Labor & Workforce Management practice, in the firm’s New York office, authored an article in Hospitality Trendz, titled “Manager Misclassification: A Pervasive Wage and Hour Legal Issue.”

Following is an excerpt (see below to download the full article in PDF format):

Misclassification can be a costly mistake because the Fair Labor Standards Act (“FLSA”) — the federal wage and hour law — provides that employees misclassified as exempt are entitled to back overtime wages and an amount equal to the unpaid back wages in “liquidated damages,” which is the interest component for the time the employee’s wages were improperly withheld, for a two or three year period depending on whether the back violation is found to be “willful,” meaning that the employer knew or should have known that its wage and hour practices violated the FLSA. To make matters worse, if there is a judgment for back wages, meaning that a judge or jury found that the owner/operator is responsible for paying back wages to its misclassified managers, the FLSA states that the owner/operator is also responsible for paying the employee’s attorney’s fees, which (when added to an owner/operator’s own legal fees) can be exorbitant.

To avoid misclassification, owner/operators should routinely audit their exempt employee workforce, specifically focusing on the job functions being performed by its managers. If a manager is not regularly supervising at least two full-time employees or their equivalent, and does not have the ability to hire, fire, promote, discipline, or appraise performance, that manager is likely misclassified. Manager misclassification can be found, but is by no means limited to the following positions: assistant managers, floor managers, housekeeping leads, bell captains, and sous chefs.

Resources

Industries

Jump to Page

Privacy Preference Center

When you visit any website, it may store or retrieve information on your browser, mostly in the form of cookies. This information might be about you, your preferences or your device and is mostly used to make the site work as you expect it to. The information does not usually directly identify you, but it can give you a more personalized web experience. Because we respect your right to privacy, you can choose not to allow some types of cookies. Click on the different category headings to find out more and change our default settings. However, blocking some types of cookies may impact your experience of the site and the services we are able to offer.

Strictly Necessary Cookies

These cookies are necessary for the website to function and cannot be switched off in our systems. They are usually only set in response to actions made by you which amount to a request for services, such as setting your privacy preferences, logging in or filling in forms. You can set your browser to block or alert you about these cookies, but some parts of the site will not then work. These cookies do not store any personally identifiable information.

Performance Cookies

These cookies allow us to count visits and traffic sources so we can measure and improve the performance of our site. They help us to know which pages are the most and least popular and see how visitors move around the site. All information these cookies collect is aggregated and therefore anonymous. If you do not allow these cookies we will not know when you have visited our site, and will not be able to monitor its performance.