Misclassification as Exempt From Overtime

Misclassifying employees as "exempt" from receiving overtime pay is a common violation by employers. An employee classified as "exempt" is usually paid a salary, and not paid any overtime. An employee classified as "non-exempt" is paid hourly, and is entitled to overtime pay if he or she works more than 8 hours in a day or 40 hours in a week. The Fair Labor Standards Act ("FLSA") creates a general presumption that ALL employees are entitled to minimum wage and overtime unless the employer can show that the employee meets an exception to the FLSA.

Under California law, overtime and minimum wage exemptions apply to executive, administrative or professional employees, as well as outside salespersons and state and local government employees, among others. Due to the complexity of these categories, contact a misclassification attorney at Workplace Justice Advocates, a Professional Law Corporation, to determine whether you have been misclassified as "exempt" and therefore owed overtime compensation. It is important to know that there is no hard-and-fast rule to determine whether you are exempt or non-exempt under the FLSA, rather, there are several factors that must be analyzed with respect to the actual day-to-day duties of your job. The general exceptions and factors are outlined below.

To satisfy the exemption for executive employees, an employee must:

• Be paid a salary of at least $455 per week;
• Have a primary duty of managing the enterprise or managing a customarily recognized department or subdivision of the enterprise;
• Customarily and regularly direct the work of at least two or more other full-time employees or their equivalent; and
• Have the authority to hire and fire other employees, or the employee’s suggestions and recommendations as to the hiring, firing, advancement, or promotion or any other change of status of other employees must be given particular weight.

To satisfy the FLSA’s administrative exemption, an employee must:

• Be compensated on a salary or fee basis of at least $455 per week;
• Have a primary duty concerning performance of office or non-manual work directly related to the management or general business operations of the employer or the employer’s customers; and
• Have a primary duty that includes the exercise of discretion and independent judgment with respect to matters of significance.

To satisfy the FLSA’s professional exemption, an employee must:

• Be compensated on a salary or fee basis of at least $455 per week;
• Have a primary duty concerning the performance of work requiring advanced knowledge, defined as work which is predominantly intellectual in character and which includes work requiring the consistent exercise of discretion and judgment;

In addition:

• The advanced knowledge must be in a field of science or learning; and
• The advanced knowledge must be one that is customarily acquired by a prolonged course of specialized intellectual instruction.

To satisfy the FLSA’s outside sales exemption, the employee must:

• Have a primary duty of making sales (as defined by the FLSA), or obtaining orders or contracts for services or for the use of facilities for which a consideration will be paid by the client or customer; and
• Be customarily and regularly engaged away from the employer’s place or places of business.

There are several other considerations and exceptions to the FLSA’s overtime rules and the facts of each case are different, therefore, you should contact our misclassification attorneys at Workplace Justice Advocates, PLC to find out whether you have been properly classified as “exempt” by your employer.