Even the most sophisticated employer in the most intellectually demanding industry may misclassify its workers as “exempt” when they are, in fact “non-exempt.” The increasing number of misclassification litigation is a sure sign that no one is completely immune from inadvertently misclassifying workers.
What exactly are the workers “exempt” from anyway? The federal Fair Labor Standards Act (FLSA) requires that workers be paid a minimum wage for every hour they work and an overtime premium for any hours in excess of 40 hours worked in a week, but it permits employers from excluding certain types of employees from each of these requirements; hence, they are “exempt” employees. The most common areas of exemption are known as the “white collar” exemptions. These exempt employees are:
Of course, these “white collar” classifications may appear straightforward, but like the roads in the Tuscan hillside, they can become quite foggy and have twists and turns from time to time. Don’t fall for the typical myths about exempt classifications.
Myth No. 1: If the employee is paid a “salary” rather than “hourly,” the employee must be “exempt.”
Although any employee who is paid on an “hourly” basis … Keep reading