Misclassifying Exempt vs. Non-Exempt Employees | Mann & Elias
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Misclassifying Exempt vs. Non-Exempt Employees


Overtime pay for employees is governed by the Fair Labor Standards Act (FSLA), the same law that determines minimum wage, recordkeeping for employees and hours worked. According to the law, non-exempt employees must receive overtime pay for hours worked over 40 in a workweek at a rate of not less than time and one-half their regular salary. In 2019, changes were made to what qualified an employee as exempt or non-exempt but the classification of employees can still be confusing to employers, according to an employment attorney Los Angeles.

According to the Department of Labor, an exempt employee must meet certain tests regarding job duties and be paid on a salaried basis not less than $684 per week. Up to 10 percent of the employee’s income may consist of nondiscretionary bonuses and incentives, including commissions. A job title does not determine whether someone is exempt. However, an exempt employee must involve managing the business or managing a recognized department or subdivision of the company. They must direct the work of at least two or more full-time employees, and they must have the authority to hire or fire other staff members. If they do not have the authority to hire and fire, they must provide input to those that are responsible as to the hiring, firing, advancement, promotion or any other change of employee status.

Method of Payment

One way to determine if your employees are exempt or non-exempt is the method you use to pay them. Wage and hour attorneys Los Angeles say that, for the most part, employees who are paid hourly are considered non-exempt. There is a computer employee exemption for those who are employed as computer systems analysts, computer programmers, software engineer or similar positions and they must be paid more than $27.63 per hour. Other positions paid hourly are normally considered exempt and therefore eligible for overtime pay.

Manual Labor

An additional factor that must be used to determine whether an employee is non-exempt is the job they are hired to do. Employees who are manual labors or perform work involving repetitive motions, physical skill or energy are not classified as exempt. Carpenters, electricians, plumbers, craftsmen and construction workers may not be classified as exempt, overtime dispute lawyers Los Angeles explain. On the other hand, you may not classify an employee as exempt simply because they hold a college degree. The exempt status is based on salary and job duties, not whether their job requires an advanced degree.

California Laws

In addition to laws put in place by the federal government, there are also exemption laws put in place by each state. An unpaid overtime lawyer Los Angeles says that for an employee to be considered exempt in California, they must earn a salary of no less than two times the state minimum wage for full-time employment. Simply paying an employee a salary does not qualify for exempt status. In order to be considered exempt in California, employees must be primarily engaged in executive, administrative or professional duties. The general rule is that 50 percent of their job requirements must be related to those duties. They must be expected to make decisions based on independent judgement and meet the salary requirements.

Overtime Pay

In California, non-exempt employees must be paid overtime rates if they work more than eight hours in a single workday. They must also receive overtime pay if they work more than 40 hours or more than six days in a regular workweek. Employees who work those hours, according to an employment attorney Los Angeles, must be paid time and a half the employee’s regular hourly salary. If an employee works more than 12 hours in a single workday or an excess of eight hours on the seventh day of a workweek, they must be paid double their regular salary.

Misclassifying Employees

Because misclassifying employees results in significant lost revenue to the state in the form of payroll taxes, California takes such actions very seriously. An employer who misclassifies an employee as exempt could be held liable for unpaid wages for the employee as well as minimum wage violations and penalties. The reason for the minimum wage violations is due to the fact that an employee who works more than 40 hours in a week who does not receive overtime is not earning the required minimum wage ordered by the state. California Labor Code §1199lists penalties for misclassification as follows:

  • First violation – $50 per underpaid employee for each pay period during which they were underpaid
  • Subsequent violations – $100 per underpaid employee for each pay period during which they were underpaid
  • The employer must pay the employee all underpaid wages

Can I Be Fired for Filing a Complaint About my Exempt Status?

Wage and hour attorneys Los Angeles say that you cannot be fired for filing a lawsuit for unpaid overtime. Your employer cannot take retaliatory action nor can they reduce your pay if you choose to file a claim based on your exempt status. Should an employer take such action, they could face additional litigation for wrongful termination, an unpaid overtime lawyer Los Angeles explained. This could mean additional compensation in the form of damages, reinstatement, back pay or other relief due to the unlawful actions of the employer.

If you believe your employer has misclassified you as exempt and they are refusing to pay you overtime, you need to reach out to an employment attorney Los Angeles who can guide you on what steps to take to get the compensation you are entitled to receive. The Law Offices of Mann & Elias are overtime dispute lawyers Los Angeles who with a reputation you can trust. They defend and represent those who are dealing with unfair practices in their employment. The wage and hour attorneys Los Angeles understand that dealing with an employment issue can be difficult and they are ready to help you with your issue. Give them a call today at 323-886-9564 to set up a no-obligation consultation.


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