The application of minimum wage laws to a manager largely depends on the manager's role. Based on federal government regulations relating to job duties, many managers are exempt from coverage by minimum wage laws. Some managers might not be exempt, however, and for them the minimum wage is the same as it is for any other employee. The exact minimum wage would depend on the state in which the employer does business.
Federal labor law, specifically the Fair Labor Standards Act, establishes the right to a minimum wage for most employees. But the FLSA also designates some employee categories as exempt from wage laws, as well as overtime laws. Many white-collar employees are among these exempt occupations, meaning minimum wage laws might not cover many business managers. For the exemption to apply, a manager must receive pay as a salary rather than by the hour, and must earn at least $455 a week as of 2011. For a manager to be exempt, then, that salary threshold amounts to a minimum wage of a sort.
The U.S. Department of Labor spells out specific job duties a manager must have to be exempt from minimum wage laws. A manager could be exempt as either an executive or administrative employee. The executive exemption applies to employees who manage an entire business or a "customarily recognized department or subdivision," while supervising at least two other full-time employees and retaining the authority to hire and discharge employees or give significant input to such moves. The administrative exemption applies to managers who perform office work — not manual work — that directly relates to general business operations, and who have the authority to exercise independent judgment regarding key business matters.
Minimum wage laws might apply to some managers, especially to those whose employers pay by the hour, or those who perform manual work in addition to their management duties. In these cases, the minimum wage depends on location. In 2011, the minimum wage at the federal level is $7.25 an hour, and 24 states have established an equal minimum wage. Seventeen states plus Washington, D.C., have higher minimum wages, while nine states have no minimum wage or a lower minimum wage.
When state minimum wages differ from the Fair Labor Standards Act minimum wage, the U.S. Department of Labor calls for the higher minimum wage to apply. In the nine states with a lower minimum wage or no minimum wage, the federal minimum wage usually would apply. But the FLSA does not cover businesses if their annual gross sales are less than $500,000 and their operation does not involve interstate commerce. Thus, managers at smaller businesses in Arkansas, Minnesota, Wyoming and Georgia could receive the lower minimum wages as provided by the law in those states. And smaller employers in Tennessee, South Carolina, Mississippi, Louisiana and Alabama could pay managers any amount, since those states have no minimum wage.
- U.S. Department of Labor: Fact Sheet #17A: Exemption for Executive, Administrative, Professional, Computer & Outside Sales Employees Under the Fair Labor Standards Act (FLSA)
- U.S. Department of Labor: Minimum Wage Laws in the States — January 1, 2011
- U.S. Department of Labor: Handy Reference Guide to the Fair Labor Standards Act
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