Are Managers Ever Personally Liable for Wage & Hour Violations?

While companies break wage and hour laws all the time, depriving their employees of the earnings they deserve, the fault does not always lie with the company alone. A manager can be held personally liable if his or her company fails to adhere to the Fair Labor Standards Act’s regulations regarding overtime and minimum wage rules.

Under the Fair Labor Standards Act (FLSA), the definition of “employer” includes “any person acting directly or indirectly in the interest of an employer in relation to an employee.”  Personal liability attaches to a manager when both the company and the manager are found by a court to be ” joint employers.” This designation is made if the employee’s attorneys prove that the manager acted either directly or indirectly on behalf of the larger company.

Can This Happen in Texas?

These sorts of wage and hour violations can and do happen here in Texas, but we have some specific rules.

The United States Court of Appeals for the Fifth Circuit, which includes the Lone Star State, created a test to determine what actions on the part of a manager might constitute personal liability as a joint employer.

The Fifth Circuit’s test to determine a manager’s personal liability include these questions:

  • First, do you possess the power to hire or fire employees?
  • Second, do you make a work schedule for the workers you manage? Do you set any conditions of employment like the length or number of breaks a worker is allowed to take during a shift?
  • Third, do you determine when a worker receives payment? Do you have any input about how that worker is paid?
  • Finally, are you responsible for maintaining employee records?

An affirmative answer to any of these questions can indicate a manager’s personal liability, but there is much more to it than that.

If a manager has bears some of the responsibilities referenced in the test questions, but not all, or shares them with another party, then the decision of whether or not an individual is a joint employer is left to judicial discretion.   In cases like these, having an experienced employment law attorney onboard to argue your case is vitally important.

How can Employers Protect Managers from Personal Liability?

The best way to protect managers from bearing personal liability in wage and hour violations is to ensure compliance with all FLSA regulations.  A company can also limit personal liability for its managers by providing training to the employees who implement wage and hour policies to ensure the complexities surrounding adherence with the FLSA are being met.

Finally, managers can protect themselves from exposure to personal liability by educating themselves on FLSA regulations, ensuring their company is in compliance with those rules, and by working in the positions as supervisors to foster communication, equity, and respect in the workplace.  If your organization needs assistance with FLSA matters, the experienced employment lawyers at Simon | Paschal PLLC can help.  Call (972) 893-9340 to set up a consultation today.

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