Employee Misclassification

The Fair Labor Standards Act a/k/a “FLSA” requires companies to pay their employees overtime wages for all time worked beyond 40 hours in a particular workweek. These overtime wages are calculated at a rate of 1 ½ times the employee’s regular hourly rate. For example, an employee who is paid $30 per hour would be entitled to an overtime rate of $45 per hour for all hours worked over the 40 hour threshold. For salaried employees, you would have to calculate the regular hourly rate as well as determine the amount of time the salary was intended to cover. For example, an employee whose salary is broken down to $20 per hour would be entitled to $30 per hour for all hours worked above and beyond what their salary was intended to cover.

While the general rule requires employers to compensate employees at an overtime rate for hours worked over the 40 hour threshold, the FLSA also permits exceptions to the general rule. These exceptions are called “exemptions.” The FLSA lists a number of exemptions that permit an employer to not pay particular employees overtime pay. To determine whether an employee is exempt from overtime can, at times, be complicated.

Determining Whether Employees Are Exempt

The absolute main consideration of whether an employee is exempt is based upon the employee’s primary job duties – not their job title. The FLSA has several main exemptions including:

  1. Executive Employee Exemption – this includes employees who run the business or a recognized department of the business. These employees supervise at least 2 or more employees and they have the ability to hire and fire employees. Examples of Executive Employees: executives, owner, and supervisor.
  2. Administrative Employee Exemption – this includes employees whose primary job duties include performing office work or nonmanual work on matters of significance relating to the management or business operations of the company or the company’s customers and whose work requires the exercise of discretion and independent judgment – the ability to make decisions on behalf of the company as opposed to just following a job plan. Examples of Administrative Employees: administrators, analysts, and accountants.
  3. Professional Or Creative Employee Exemption – this includes employees whose primary job duties include work that requires advance knowledge or education and requires the consistent exercise of discretion and independent judgment. The advanced knowledge must be in a field of science or other prolonged course of specialized instruction. Examples of Professional Or Creative Employees: attorneys, doctors, architects, engineers, and musicians.
  4. Computer Professional Exemption – this includes employees who work as programmers or software engineers performing duties like designing computer systems or programs. Examples of Computer Professional Employees: system analyst, software engineer, and computer programmer.
  5. Outside Sales – this includes employees who work off the company’s premises whose primary job duty is making sales. Examples of Outside Sales Employees: sales representatives and account managers.

Unfortunately, many companies illegally classify employees under these exemptions when the employees do not fit the exemption. For example, companies may classify just about all of its office workers as exempt under the Administrative Exemption. The Administrative Exemption, however, only applies to those employees who have the ability to make significant decisions on behalf of a company, e.g. negotiate contracts on behalf of the company. It does not apply to employees who perform routine jobs day in and day out based upon a planned execution of the job. Employers may also classify all salaried employees as exempt. This is also illegal. Not all salaried employees are exempt from overtime.

Wrongly classifying employees as exempt as opposed to non-exempt is called “misclassification.” If you believe you have been misclassified under the FLSA, contact our overtime lawyers for a free consultation.

If Your Employer Misclassified You, You Could Be Entitled To Compensation

If you have been misclassified by your employer, you would be entitled to your overtime pay at a rate of 1 ½ of your regular rate for the time period of the remaining statute of limitations. Additionally, you would be entitled to liquidated damages a/k/a “double damages” which doubles the amount of pay you are entitled to receive. The Court may also require that the company pay your attorneys’ fees and costs.

In order to recover these damages, you would be required to file a lawsuit. Overtime lawsuits can also be filed as a collective or class action which permits other similar employees join the case to recover their overtime as well. This permits employees a way for pursuing relatively small claims together that could otherwise be too costly.

If It’s Not Right, You Have To Fight! At Martin & Martin, our Atlanta overtime attorneys successfully represent employees like you every single day. You worked hard for your pay, let us work hard to get you what you are owed. Please contact us online or call us at (404) 831-8721 for a free consultation.

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