Are Managers Exempt from Overtime Pay Under the FLSA?

Managers are not automatically exempt from overtime pay. Under the Fair Labor Standards Act, an employer only escapes the obligation to pay time-and-a-half for hours over 40 in a workweek if a manager’s pay and actual job duties clear every part of a specific set of tests.¹ A job title is not one of those tests. Someone called a manager who fails any single requirement is entitled to overtime, and the employer carries the burden of proving otherwise.

What the Pay Has to Look Like

Two pay requirements come before anything else. First, the salary basis test: the employee has to receive a fixed, predetermined amount each pay period that does not shrink because of the quality or quantity of work.² Docking a salaried manager’s pay for leaving early on a slow day is the kind of deduction that can destroy the exemption entirely.

Second, the salary level test: to qualify for the executive exemption that applies to most managers, the employee has to earn at least $684 per week, or $35,568 a year.³ The Department of Labor tried to raise that number in 2024, first to $844 per week and then to $1,128, but a federal court in Texas vacated the rule in November 2024 and the threshold reverted to $684.⁴ The DOL has said it plans to issue a new rule raising the floor, but as of early 2026 no final figure or effective date had been announced.

If a manager earns less than $684 per week, the analysis ends there. That employee is entitled to overtime no matter what their duties look like.

What the Job Has to Look Like

Clearing the pay requirements only gets an employer halfway. The manager’s real, day-to-day work has to satisfy three duties requirements under what the FLSA calls the executive exemption. Courts and the DOL look at what the person actually does, not what the employer labels the position.

The primary duty has to be managing the business or a recognized department or subdivision of it.⁵ Management here means things like planning work, assigning tasks, training employees, setting pay rates, handling complaints, and controlling a budget.

The manager also has to regularly direct the work of at least two full-time employees, or the equivalent in part-timers. One full-time worker plus two half-time workers meets the threshold; supervising a single employee does not. The supervision has to be a consistent part of the job, not a fill-in role during vacations or a busy season.

Finally, the manager needs genuine authority over hiring, firing, and other personnel decisions. When someone else has the final say, the manager’s recommendations still have to carry what the regulations call “particular weight.” The DOL looks at whether making those recommendations is actually part of the job and how often they get relied on.⁴ A manager whose input genuinely shapes who gets hired, promoted, or let go can meet this test even without final decision-making power. A manager who only fills out performance reviews that no one reads probably cannot.

Working Supervisors and the Primary Duty Question

Most disputes over manager overtime turn on the primary duty piece, especially for assistant managers and shift leads who spend real time doing the same work as their team. The regulations give four factors:

The relative importance of the managerial duties compared with the non-exempt tasks. Running scheduling, staffing, and inventory for a department may matter more to the business than the hours spent stocking shelves, even if the shelving eats up more clock time.
How much of the workweek goes to management versus hands-on work. More than half is a strong indicator, but not automatically decisive.
How freely the employee operates. Someone who runs their own shift without close direction looks more exempt than someone whose day is closely scripted by a higher-level manager.
How the employee’s pay compares with the wages of the non-exempt workers doing the same hands-on tasks. A significant premium points toward exempt status.

No single factor controls.⁶ An assistant manager who spends 60 percent of each shift on the sales floor but is the only person handling staffing, opening and closing, and cash reconciliation might still qualify as exempt. An assistant manager with the title but no real authority over the team probably does not.

The Highly Compensated Shortcut

There is a faster route to exemption for higher earners. An employee with total annual compensation of at least $107,432 — including at least $684 per week on a salary basis — qualifies for the highly compensated employee exemption as long as they do office or non-manual work and regularly perform at least one duty that would qualify under the executive, administrative, or professional exemption.⁷ The duties side is intentionally easier: a well-paid operations director who regularly directs two or more employees can be exempt under this rule even if the full executive test would be a closer call. The DOL had planned to raise the HCE threshold to $151,164, but that increase was struck down along with the rest of the 2024 rule.³

State Law Can Change the Answer

Federal law sets a floor, not a ceiling. The FLSA requires employers to follow whichever rule — federal, state, or local — is more favorable to the employee.⁸ A manager can clear every federal test and still be owed overtime under state law.

Several states set their salary thresholds for exemption well above the federal $684 per week, and some require more than double that amount. State duties tests can also be stricter. A few define “primary duty” as the task consuming the majority of working time, which makes it much harder to classify a working supervisor as exempt. Anyone evaluating a manager’s classification needs to check both federal rules and their state labor department.

What You Can Recover If You Were Misclassified

A misclassified manager is not limited to the missing overtime. The FLSA also provides liquidated damages in an equal amount, which effectively doubles the recovery.⁹ A manager shorted $30,000 in overtime can recover $60,000, and the statute requires the employer to pay attorney’s fees on top of that.

How far back a claim reaches depends on whether the violation was willful. Standard misclassification allows two years of back pay. If the employer knew or showed reckless disregard for whether the classification was right, the lookback extends to three years.¹⁰ FLSA claims can also be brought as collective actions, so one misclassification pattern can turn into liability across an entire workforce.

If You Think You Should Be Getting Overtime

You have two main options. The first is filing a complaint with the Department of Labor’s Wage and Hour Division, which investigates overtime violations at no cost. You can start a complaint by calling 1-866-487-9243 or contacting the nearest WHD field office.¹¹ The second is filing a private lawsuit to recover back pay, liquidated damages, and attorney’s fees.⁹

The FLSA prohibits employers from retaliating against you for filing a complaint, cooperating with an investigation, or testifying in a proceeding. Firing or disciplining someone for raising an overtime claim is a separate violation that can lead to reinstatement, lost wages, and additional damages. The clock on filing runs from the date the overtime should have been paid, so waiting can cost you weeks of recoverable pay.

1
U.S. Department of Labor. Fact Sheet #23: Overtime Pay Requirements of the FLSA
2
eCFR. 29 CFR Part 541 – Defining and Delimiting the Exemptions for Executive, Administrative, Professional, Computer and Outside Sales Employees
3
U.S. Department of Labor. Earnings Thresholds for the Executive, Administrative, and Professional Exemption
4
U.S. Department of Labor. Fact Sheet #17B: Exemption for Executive Employees Under the Fair Labor Standards Act
5
eCFR. 29 CFR Part 541 – Defining and Delimiting the Exemptions for Executive, Administrative, Professional, Computer and Outside Sales Employees – Section 541.100
6
eCFR. 29 CFR 541.700 – Primary Duty
7
U.S. Department of Labor. Fact Sheet #17H: Highly-Compensated Employees and the Part 541 Exemption Under the Fair Labor Standards Act
8
U.S. Department of Labor. Fact Sheet #17A: Exemption for Executive, Administrative, Professional, Computer and Outside Sales Employees Under the Fair Labor Standards Act
9
Office of the Law Revision Counsel. 29 USC 216 – Penalties
10
Office of the Law Revision Counsel. 29 USC 255 – Statute of Limitations
11
U.S. Department of Labor. How to File a Complaint