Exempt and Non-Exempt Employees
The Fair Labor Standards Act (FLSA) was created in 1938 to protect workers from being taken advantage of in the tight labor market that was overrun with unemployed workers during the Great Depression. Due to the high unemployment levels, companies could mistreat their employees by working them long hours without breaks and paying them miniscule amounts. However, labor attorneys and unions began to fight for policies that would establish a fair minimum and overtime wages.
A Los Angeles workplace lawyer will tell you that the FLSA is a far-reaching law that applies to all employers, no matter how big or small. Some important elements defined by this act are:
- A 40-hour workweek is the standard for a full-time job.
- A federal minimum wage is established at the current rate of $7.25 an hour and $2.13 for tipped employees.
- Overtime is required for certain employees.
- Restrictions are placed regarding child labor.
You may have seen the terms exempt and non-exempt on job applications, and knowing the difference between these classifications is crucial to the case your wage and hour attorneys Los Angeles will build.
The FLSA creates two classifications of employees for minimum wage and overtime purposes, and these two classification label employees as exempt or non-exempt from overtime and certain wage requirements. An unpaid overtime lawyer Los Angeles will have a clear and detailed definition of each covered employee in the event you need lawyer to sue an employer for unpaid wages.
The court and LWDA rely on economic realities to evaluate if a worker should be classified as an employee or a contractor. The main question in this evaluation is, does the employer solely control the work done by the worker? Other factors to consider include;
- Does the employer provide the resources required for the job to the worker?
- Does the work require special skills?
- Is the job permanent?
- Does the work form a fundamental part of the employer's business?
- Does the worker do another job apart from that of the employer?
- How the worker’s payment is calculated — is it time or piece rate?
In this case, a worker is determined as an employee if the person who receives the services they offer has primary control over how the job is done and has specified expected results. On the other hand, independent contractors are workers who control how they do their work and earn a specified rate for a particular task. An excellent example of an independent contractor are Uber and Lyft drivers.
What are the repercussions of being misclassified as independent contractors?
- When you are misclassified as a contractor instead of an employee, you face some costly legal and tax consequences.
- You are required to contribute towards your social security and Medicare taxes from your own pockets — as, for employees, employers pay half of this amount
- You are not qualified for unemployment insurance coverage —employees are eligible for this coverage
- You cannot receive any workers’ compensation benefit; it is only entitled to employees
- You will not receive workplace benefits such as minimum wage, sick pay, or overtime pay
- You are not eligible for healthcare insurance provided by the employer under Obamacare
There are a lot of benefits you lose for working as an independent contractor as compared to working as an employee. The main reason why employers prefer classifying workers as contractors instead of employees is the fact that they have a chance to save more. However, if you believe that you are misclassified as a contractor while working as an employee, you need to take action.
You might assume that the FLSA covers only employees who work for large companies, but, in reality, the law covers the vast majority of workplaces. To be specific, an employer is covered by the FLSA if their annual sales total $500,000 or more or who conduct business across state commerce.
Employees that are considered non-exempt are covered by the reaches of the FLSA.
A non-exempt employee must be paid at least the federal minimum wage ($7.25 in 2021) for regular time and at least time and a half for any hours worked past the standard 40-hour workweek. There are amendments to these wage and overtime laws depending on which state you are working in.
California has stronger laws protecting employees than most states. For example, the California government has been steadily increasing the minimum wage over the past few years. As of 2021, it’s $13 an hour for companies with 25 or fewer employees and $14 for larger employers. In 2023, the minimum wage will officially be $15 for all California employees.
In regards to overtime, California employees must receive 1.5 times their regular rate after working over eight hours in a day or 40 hours in a single week. After working a 12-hour day, state law dictates that employees must receive double their regular hourly rate.
In addition to the overtime laws regarding the workday, California overtime laws can apply to the workweek as well. If an employee works seven days straight, they receive time and a half for the first eight hours of work and double time for additional hours worked on the seventh day.
If any of the above situations apply to you and you were not paid overtime, contact overtime dispute lawyers Los Angeles to win back your lost wages.
Not all workers are protected by the FLSA. Because exemptions are generally narrowly defined by the FLSA, your wage and hour attorneys Los Angeles can cross-reference your position with the exact terms and conditions outlined to see if you are eligible for compensation.
The FLSA divides exemptions into:
- Minimum wage and overtime exemptions
- Overtime only exemptions
To be exempt from the regulations required by the FLSA, an employee must be salaried, and their job position must fall into a specific category of exempt duties. As of 2020, the FLSA salary threshold is $36,568 per year, meaning that employees who make over this amount annually are not eligible for overtime pay.
The positions exempt from FLSA protections are:
- Executive - An employee that is in a managerial role and supervises others and is paid on a salary basis is not eligible for overtime. The employee must also have the authority to weigh in on the hiring and firing of employees.
- Administrative - This generally applies to desk jobs. To be exempt, an administrative employee's duties must relate to office and non-manual labor.
- Professional - A professional employee's job must require advanced knowledge and education.
- Computer Employee - Typical job titles that fall under this category are computer systems analyst, computer programmer, software engineer, and any other computer-related position. These exempt job positions must require a deep and thorough understanding of computer systems.
- Outside Sales Employee - Those who work in sales are not usually covered by the FLSA. Their primary duties are making sales and writing up contracts, and in order to be exempt, they must be regularly engaged away from the employer's place of business.
Now that you’ve seen an overview of which employees receive the benefits and protection provided by the FLSA, you have a better understanding of any wage or overtime violations you may have encountered at your job. Hiring a Los Angeles workplace lawyer will ensure that you are paid the full amount that you are owed by your employer.