Misclassifying Employees As Salaried Or Exempt
Employers who want to avoid paying overtime, tracking time records, or providing rest and meal breaks might think they can get away with it by giving their employees fancy titles and designating them as salaried or exempt. This is a common misconception which may or may not be intentional, but it can have serious financial consequences for the employer.
Salaried or exempt workers earn a set amount regardless of how many hours they work. These kinds of jobs typically require more than 40 hours per week. They may also involve workloads that vary with the season or according to certain deadlines. An employer may attempt to save money by paying such employees a set salary regardless of the number of hours the job requires.
Whether employees are appropriately classified as salaried or exempt under state and federal law is determined by the work they actually do, not by their employers’ designations. Actual work activities performed during over half of the work time determine the nature of the employment.
Certain jobs are legitimately exempt. These are typically high level executive, administrative or professional employees. Artistic, software design, or sales jobs that require a great deal of flexibility may also be exempt. These types of salaried employees may work long hours without overtime pay, but their salaries appropriately reflect the time requirements and complexity of their jobs.
Under California law, all employees are entitled to overtime pay unless the employer can prove the employee is legitimately exempt. Courts err on the side of protecting employees from unfair labor practices. They presume that employees are entitled to overtime and other rights, and the burden is on the employer, not the employee, to show that the employee was properly compensated.
An employer that has improperly designated an employee as exempt can assume some heavy consequences. The employer may be on the hook for the employee back pay for overtime and additional wages to cover rest and meal breaks. In addition, the employer may incur stiff penalties for a variety of labor law violations that come with misclassifying an employee as salaried or exempt.
If you believe your employer has improperly designated you as salaried or exempt in order to avoid paying you overtime or providing you with rest and meal breaks, you need to speak with an experienced attorney right away. An attorney can compare your employee classification against the work you are actually doing to determine whether your employer is shirking the law to save money.
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