Are You Being Cheated Out of Overtime? What You Need to Know About Misclassification
To be exempt, workers have to meet certain criteria
Do you suspect that you’re being cheated out of overtime? If so, you’re not alone.
Unfortunately, many employers shortchange workers by misclassifying them as exempt.
However, it’s important to know that under federal law, your status as exempt or non-exempt is not based on your job title alone.
If you’re working more than 40 hours a week and not earning time-and-a-half for it, it might be worth examining whether you were properly classified.
One Way Employers Avoid Paying Overtime
Misusing job classifications is a common way that employers attempt to duck out of paying overtime.
For example, a worker may be promoted to a supervisory position. Along with the so-called promotion, he or she may have a change in classification, from non-exempt to exempt. All of sudden, the person may find that he or she is no longer eligible for overtime.
Sometimes that can result in people in supervisory positions earning less per hour than the hourly employees who are working alongside them – even when supervisors’ job duties still largely mirror those of regular workers.
What the Law Says About Exempt and Non-Exempt
The Fair Labor Standards Act (FLSA) spells out the terms for whether a person is considered exempt or non-exempt.
Exempt refers to “exempt from overtime laws.” Exempt workers generally receive the same amount of compensation no matter how many hours they have worked.
Non-exempt means that that an individual is not exempt from overtime laws. Non-exempt employees are generally entitled to receive time-and-a-half for any hours worked over 40 in a workweek.
However, employers do not get to simply decide who is exempt and who is non-exempt.
Generally, exempt status most often applies to employees in executive and professional salaried positions, as well as some administrative positions. However, some positions that fall outside of these categories may also apply, including people doing sales or certain kinds of computer-related work. (The Department of Labor has a fact sheet that further explains these categories.)
Employees who are eligible for overtime are considered non-exempt. That means that those employees are entitled to overtime compensation for any hours worked over 40 in a given week. Non-exempt employees are generally paid by the hour and work in non-executive and non-managerial positions.
Have You Been Misclassified?
The FLSA has a duties test to determine if workers should be classified as exempt or non-exempt. While there are specific qualifications for each category of work, people are generally exempt from overtime (that is, not qualified to receive overtime) if they can answer yes to these four questions:
- Does your salary come out to more than $455 per week?
- Do you manage other workers?
- Do you have the authority to hire or fire?
- Does your job involve decision making related to the strategy or direction of the business?
So that means if you’re a shift supervisor who gets paid less than $455 per week and you do not have the authority to hire or fire, you may be able to make a case for misclassification.
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