Do Account Managers get Overtime Pay?
Account managers oversee the relationship between a company and its clients to foster long term business partnerships. They work at advertising, law, financial, government or retail companies. Account executives are the liaison between the client and a company’s other departments such as sales, graphics, and marketing. They streamline customer communications and advocate for the client’s long term and short term goals. Many employers misclassify Account Managers and Account Executives as overtime-exempt workers despite the fact that their primary duties and salaries entitle them to overtime compensation. As a result, Account Managers are routinely overworked and underpaid.
According to the Fair Labor Standards Act (FLSA), employees that receive less than $23,600 and do not perform “high-level work” with independent judgment are entitled to overtime compensation. In many cases, Account Managers fall under the FLSA’s administrative employee overtime exemption which encompasses workers that essentially “keep the business running.” To be classified as an administrative worker that does not receive overtime, an account manager must perform office work, management or business operations, and independent discretion on important matters to the business. In contrast, when an account manager’s primary duty is producing and providing support for the outside sales department then they qualify for the FLSA’s outside sales classification and are eligible for overtime pay. To be eligible for the outside sales exemption, an employee must primarily sell, make contracts for, or receive orders for goods or services at their clients’ place of business rather than via telephone, mail, or email.
Klein vs. Torrey Point Group, LLC (2013)
The distinction between an overtime-exempt and nonexempt Account Manager is best described in the 2nd Circuit court case Klein vs. Torrey Point Group, LLC (2013). In this legal dispute, an Inside Account Manager, William Klein, sued his former employer, a software consulting firm, for failing to “make required overtime, severance, commission, and bonus payments” to him. Klein and his employer testified that Klein’s principal responsibility was providing sales support to a singular outside salesperson in the marketing department, but he also completed general tasks like customer communications and general logistics. Neither Klein nor his employer presented sufficient evidence for the court to discern whether or not sales activities comprised the majority of Klein’s professional responsibilities.
The court explained that an account manager is entitled to overtime if he/she routinely and predominantly supports a singular outside salesperson without engaging in any other duties pertaining to general business operations. In contrast, an account manager mainly involved in “vendor relations, customer communications and support, and order logistics” would not qualify for overtime compensation because they would fall under the FLSA administrative overtime exemption.
Seek Legal Assistance
If your employer has failed to pay you your rightful overtime compensation, the Law Office of Christopher Q. Davis, located in New York City, can help you. Contact us today at (646) 430-7930 to schedule a free case evaluation and receive experienced legal counsel.