Franchise Assistant Manager Misclassification: The Duties Test Nobody Runs

The U.S. Department of Labor's Wage and Hour Division recovered more than $259 million in back wages in 2025, the highest total in five years, even though the agency closed fewer cases than it had the year before. Franchise operators supplied a disproportionate share of that total, and one job title turns up again and again in the settlement files: assistant manager. Staples paid $38 million to close a class action over assistant manager overtime pay. Duane Reade settled a nearly identical claim for $13.5 million. Franchise assistant manager misclassification isn't a single-brand problem. It is a structural one, built into how the role gets defined at the franchisor level and then copied across every unit in the system.

Why the title on the door doesn't decide anything

Franchise operators tend to treat exempt status as a function of the offer letter: salaried, title says manager, therefore exempt. The Fair Labor Standards Act doesn't work that way. An employee is exempt from overtime only if the role clears two separate tests, and a title change doesn't touch either one.

The first test is the salary threshold, currently $684 a week, unchanged through 2026. The second, and the one franchise operators get wrong most often, is the duties test. To qualify for the executive exemption, an employee's primary duty has to be managing the business or a recognized department of it, the employee has to regularly direct the work of at least two full-time-equivalent employees, and the employee needs real hiring and firing authority, or input on those decisions that actually carries weight. Miss any one of the three and the salary is irrelevant. The person is non-exempt, and every hour past 40 in a workweek is owed at time and a half.

Where the duties test actually breaks in a franchise unit

The Department of Labor's own guidance for restaurant managers gives a rough benchmark: an employee who spends more than half a shift on a single activity generally has that activity as a primary duty. In most franchise units, the assistant manager spends the bulk of a shift running a register, expediting food, restocking, or covering a call-out, not scheduling, hiring, or directing other employees' work. Courts and DOL investigators do not take the job description's word for it. They look at what the person actually did that week, which means a franchise unit with lean staffing and an assistant manager who steps into hourly work every shift has built the exact fact pattern that loses these cases.

This is where multi-unit franchisees create their own exposure without realizing it. A single understaffed location that pulls its assistant manager onto the floor for three shifts a week is not an isolated incident. If the same staffing model runs across ten or twenty units, it is a class, and plaintiffs' firms specifically look for that pattern, because one deposition establishes the practice for every location that copied it.

What a franchise assistant manager misclassification claim actually costs

A two-year back-pay claim for a single misclassified assistant manager earning $50,000 a year rarely runs under $15,000 once overtime, liquidated damages, and legal fees are added in. Multiply that by every assistant manager who worked the same schedule at every unit that ran the same staffing model, and a claim that starts with one plaintiff regularly resolves as a class of dozens. The Staples and Duane Reade settlements did not start as $38 million and $13.5 million problems. They started as one former employee, one demand letter, and a staffing pattern nobody had audited.

Building a job description that matches the actual job

The fix is not a better-written offer letter. It is matching the written job description to the schedule the person is actually working, unit by unit, not brand-wide. That means auditing, at minimum, the percentage of a typical shift spent on hourly-employee tasks versus supervisory tasks, whether the assistant manager directs two or more full-time-equivalent employees during a majority of their shifts, and whether their input on hiring and firing decisions is documented as carrying weight rather than just solicited.

Franchise systems that get this right run the audit at the unit level, not the brand level, because staffing ratios and shift coverage vary enough between a suburban location and an urban one that a single job description rarely holds up across both.

The audit franchisors rarely require but should

Most franchise agreements are silent on classification practices entirely. Franchisors mandate uniform branding, uniform menus, and uniform point-of-sale systems, but leave wage and hour compliance to each franchisee's own HR judgment, even though a systemic misclassification pattern discovered in one unit becomes discovery material against every unit running the same job description. A franchisor that circulates a standard assistant manager job description without a corresponding duties-test audit is handing every franchisee in the system the same liability template.

Operators who track scheduling and labor allocation through a connected system, rather than reconstructing shift assignments from memory during a DOL interview, have an actual record of what the assistant manager did that week instead of what the job description says they were supposed to do. That is the difference between an audit trail and a guess, and it is the kind of operational visibility platforms like Revscale are built to surface across a multi-unit network without adding a manual reporting step for each franchisee.

What to fix before the next assistant manager review

Pull the actual weekly schedules for every assistant manager across the network for the last quarter, not the job description. Calculate the real percentage of hourly-task time versus supervisory time per unit. Any assistant manager clearing 50 percent hourly work more than half the time is a live misclassification exposure regardless of salary or title, and the fix has to happen at the unit level before the next DOL complaint or demand letter decides it for you.