Denny’s restaurants paid Assistant Managers on a salary to avoid paying them overtime, according to a lawsuit filed in New York federal court. An Assistant Manager in Horseheads, New York alleges he worked 50 to 70 hours per week on average, but was not paid overtime compensation at time- and-a-half his regular hourly rate for all hours worked over 40 each week. Instead, he says Denny’s paid Assistant Managers an annual salary regardless of the number of hours worked.
The lawsuit is directed at franchise FEAST American Diners LLC, which operates 17 Denny’s restaurants in New York. Attorneys for the Assistant Manager claim that Assistant Managers at Denny’s had primary job duties that included preparing food, helping customers, bussing tables, cleaning the restaurant, labelling and rotating food product, and checking inventory. The lawsuit alleges that the Assistant Managers did not exercise the responsibilities of a manager or use independent judgment and discretion in running the restaurants, as they did not hire, fire, discipline, or direct the work of other Denny’s employees.
The lawsuit claims that Denny’s restaurants did not provide labor budgets with enough money to cover all hours needed to complete the necessary manual labor tasks. As a result, they contend Denny’s had knowledge that this underfunding led to Assistant Managers working more than 40 hours per week while mainly performing the overtime-eligible work tasks described above. The lawsuit also alleges Denny’s failed to keep accurate time records, does not record all hours worked by Assistant Managers, and failed to post a notice explaining the minimum wage and overtime wage requirements anywhere in the restaurants.
This lawsuit continues a recent trend of restaurant workers alleging misclassification as Assistant Managers so they would be “exempt” from the FLSA requirement to receive overtime pay at time and a half for hours worked over forty in a workweek. Other restaurants hit with lawsuits claiming Assistant Managers were paid a salary to avoid overtime pay include Cracker Barrel, Dunkin Donuts, Chipotle, Jack in the Box, and Jimmy John’s.