Exempt Employee Misclassification

Misclassification of non-exempt employees as exempt can have profound implications. A worker’s classification status determines his eligibility for minimum wage, overtime compensation, and other protections like rest and meal breaks. Unfortunately, misinterpretation or deliberate misclassification can lead to significant disparities in pay and working conditions for exempt and non-exempt employees, affecting the livelihood and well-being of workers.

The Fair Labor Standards Act (FLSA) provides special exemptions for non-exempt employees, including overtime and minimum wage protections. However, exempt employees do not enjoy the benefit of these protections. The legal distinction between exempt and non-exempt employees hinges on specific criteria, which can include salary level, the basis of salary payment, and the nature of the work performed. 

• Salary: If a worker’s salary is above a certain limit, or if the worker’s base salary reflects a pre-determined amount of compensation each pay period, that worker may be considered exempt. Non-exempt employees are usually paid hourly.
• Job Duties: If a worker is an executive, administrator, professional, outside sales representative, or a certain type of computer employee, that worker may be considered exempt.

Exempt employees do not qualify for minimum wages or overtime pay, but non-exempt employees are entitled to all the protections of the FLSA. They must be paid at least the minimum hourly wage and are entitled to receive overtime pay, as well as rest breaks and meal breaks. Non-exempt employees who have been misclassified as exempt are legally entitled to lost wages.

Misclassifying employees as exempt who should be non-exempt can deprive workers of significant earnings and workplace protections. For example, employees may be forced to work long hours without appropriate compensation, missing out on overtime pay they have rightfully earned.