DOL warns restaurant manager title alone does not exempt overtime
The DOL says a manager title does not automatically cancel overtime, and restaurant workers on salary may still be owed back pay if their real duties do not meet the exemption tests.
Restaurant workers promoted to shift lead, assistant manager or general manager do not become exempt from overtime just because of the new title. Exemption depends on actual duties and salary under the Fair Labor Standards Act, not what appears on a schedule, badge or payroll line.
In restaurants, salaried managers often spend part of the night on the line, covering call-outs, opening and closing the store, taking orders, handling guest complaints and filling gaps left by chronic staffing shortages. The department’s restaurant toolkit includes manager and assistant manager guidance for restaurants with annual gross sales of at least $500,000, which are generally covered by the law.
For the executive exemption to apply, the worker must be paid on a salary basis, have management as the primary duty, direct at least two full-time employees or their equivalent, and have authority that carries particular weight in hiring or firing decisions. A manager can still be exempt while serving customers during a rush, but only if management remains the primary duty and the worker is truly supervising staff while doing that work.
The department’s 2024 overtime rule would have raised the standard salary threshold to $844 a week on July 1, 2024, and to $1,128 a week on January 1, 2025, while setting the highly compensated employee threshold at $107,432. A federal court vacated that rule on November 15, 2024, after a restaurant-industry lawsuit. The salary-basis rule defines a salary as a predetermined amount that cannot be reduced because of the quality or quantity of work, and employers may count no more than 10% of the threshold from bonuses, commissions or incentive pay for certain exempt employees.
In July 2022, the DOL recovered $56,000 for 31 managers after a Taco Bell franchise investigation. In February 2022, it recovered $63,000 for 17 restaurant managers in Fort Wayne-area restaurants after finding the salary paid did not erase overtime obligations.
Workers who think they have been misclassified should keep pay stubs, schedules, job postings, written role descriptions, manager texts and notes on how much time is spent on line work, covering shifts, opening and closing, and handling discipline or hiring decisions.
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