Under the federal Fair Labor Standards Act (FLSA), restaurant workers paid by the hour should receive overtime if they work more than 40 hours a week. That’s the law.
Some restaurants, however, try to dodge paying overtime by misclassifying some employees as “management” when, in fact, they are not. It is true that salaried workers in supervisory or managerial positions are sometimes exempt from overtime. But the FLSA has strict rules around who can and cannot be classified as exempt – and it comes down to the exact duties performed.
Not All Managers Are Exempt from Receiving Overtime
A restaurant can’t simply give an hourly worker a title such as “manager” or “assistant manager” to avoid paying them overtime. If that restaurant employee has similar duties as other nonexempt workers – working a till, serving customers, preparing food, cleaning – then he or she is owed overtime. An employee can only be considered exempt if he or she supervises others and has what’s known as “personal discretion” over their work.
FLSA Class Actions Against Restaurants
Many restaurants learn this the hard way. An Arby’s franchise in Florida, for example, currently faces a class action lawsuit on behalf of current and former non-exempt employees. The restaurant worker bringing the suit alleges she regularly worked more than 40 hours a week without being paid overtime because the restaurant misclassified her as exempt. She did not perform any managerial or supervisory duties. Rather, her work consisted of running the cash register, helping customers with orders, preparing food and cleaning. The lawsuit says the Arby’s franchisee owes her unpaid overtime for approximately 870 hours, and seeks compensation for other misclassified workers at that same location.
Also in Florida, a sous chef working for Kona Grill has filed his own class action lawsuit over unpaid overtime. He alleges the chain routinely misclassifies sous chefs and assistant managers as exempt, when they are, in fact, hourly employees and owed overtime. These workers did not have supervisory roles and did not exercise personal discretion in determining their duties.
In April, Carrabba’s Italian Grill LLC was sued in a national class action alleging it, too, misclassified nonexempt restaurant employees to avoid paying overtime. The lead plaintiff in that case, who is suing on behalf of all similarly situated Carrabba’s workers, alleges she often works more than 60 hours a week but never receives overtime. The suit alleges that, though her title was “restaurant manager,” she performed the same duties as a non-exempt employee. As such, she is owed overtime.
Damages in FLSA Misclassification Lawsuits
Plaintiffs in these lawsuits can be entitled to not only their unpaid overtime but also liquidated damages, attorneys’ fees, and costs. The amounts can be significant. Bob Evans Farms paid $16.5 million to settle a suit brought by assistant managers, and Panda Express paid a $3 million settlement to store managers.
Misclassifying employees is a serious problem in the restaurant industry and costs an average worker hundreds, if not thousands, of dollars a year in unpaid overtime. This is tough, demanding work and restaurant employees have a right to be paid all of what they are owed – especially when they sacrifice personal time by working more than 40 hours a week.