Improper Classification of Salaried Employees

Misclassified Salaried Employees May be Able to Recover Lost Wages

Understanding “Exempt” Employees

One of the most common issues in employment law is misclassification of exempt employees, which occurs when an employer incorrectly determines an employee is not entitled to overtime pay. The Fair Labor Standards Act (FLSA) and Wisconsin Wage and Hour laws require employers to pay their employees overtime pay at a rate of one and a half the regular rate for all hours worked over forty hours in a work week unless the employee clearly and unmistakably falls within the classification of an “exempt” employee. Because the overtime exemptions are very narrow, employers often misclassify employees and illegally fail to pay them overtime compensation.

Under the FLSA, an employee is “exempt,” if the employee:

  1. Is paid a minimum salary set by the FLSA; and
  2. Performs work that is considered a function of one of the FLSA exempt job categories or industries.

If an employee is properly classified as exempt, she is not entitled to overtime wages.

“White Collar” Exemptions & Common Examples of Misclassified Employees

Among the most-often claimed exemptions by employers are the “white collar” exemptions which include the executive exemption, the professional exemption, the administrative exemption, and the computer exemption. Only those employees whose job duties fit these narrow exemptions will be considered exempt from overtime compensation. Below is a brief overview of these overtime pay exemptions; for a detailed explanation, please see What is an Exempt Employee?

The Executive Exemption

The Executive Exemption refers to employees whose primary duty is management of the enterprise or a department of enterprise, who directs the work of two or more full time employees, who can hire and fire other employees, and who are paid on a salary basis of at least $684 a week.

Employers regularly misclassify team leads, line supervisors, assistant managers, shift supervisors, and foremen who do not meet each prong of the executive exemption.

The Administrative Exemption

The Administrative Exemption refers to employees whose primary duty is the performance of office or non-manual work directly related to the management or general business operations of the employer and whose primary duty includes the exercise of discretion and independent judgment with respect to matters of significance, and who are paid on a salary basis of at least $684 a week.

Employers regularly misclassify secretaries, paralegals, book keepers, and some human resources employees as administrative employees.

The Professional Exemption

The Professional Exemption refers to two types of professional employees – learned professionals and creative professionals. A learned professional’s primary duty requires the performance of work requiring knowledge of an advanced type in a field of science or learning customarily acquired by a prolonged course of specialized intellectual instruction. A creative professional’s primary duty requires invention, imagination, originality or talent in a recognized field of artistic or creative endeavor. Both types of professional employees must be paid on a salary basis of at least $684 a week.

Employers who classify certain types of employees as professionals, no matter how complex the job is, cannot use the exemption where a specific degree or course of education is not required to enter the field of work.

The Computer Exemption

The Computer Exemption refers to employees whose primary duty consists of: the application of system analysis techniques and procedures to determine hardware, software, or system specifications; the design, development, documentation, analysis, creation, testing or modification of computer systems or programs; or the design, documentation, testing, creation or modification of computer programs related to machine operating systems, and who are paid on a salary basis of at least $684 a week.

The computer exemption does not apply to all IT or information technology staff. Help desk employees who do not meet the above requirements, for example, are not exempt employees.

The Overtime Attorneys at Hawks Quindel Can Help You If You Have Been Misclassified

The experienced overtime attorneys at Hawks Quindel have assisted thousands of employees in recovering unpaid overtime pay, and are experienced in bringing both individual and class/collective actions for unpaid overtime compensation.

If you think you have been misclassified as exempt from overtime wages, or you want to learn more about your wage rights, Hawks Quindel’s wage and hour team will provide you with a free case evaluation to answer your questions and evaluate your potential claim.

Please contact us if you would like to discuss your wage rights under federal FLSA laws. Please call a Madison wage attorney directly at (608) 257-0040 or a Milwaukee wage attorney at (414) 271-8650, or email us via our Contact Page.

Understanding “Exempt” Employees

One of the most common issues in employment law is misclassification of exempt employees, which occurs when an employer incorrectly determines an employee is not entitled to overtime pay. The Fair Labor Standards Act (FLSA) and Wisconsin Wage and Hour laws require employers to pay their employees overtime pay at a rate of one and a half the regular rate for all hours worked over forty hours in a work week unless the employee clearly and unmistakably falls within the classification of an “exempt” employee. Because the overtime exemptions are very narrow, employers often misclassify employees and illegally fail to pay them overtime compensation.

Under the FLSA, an employee is “exempt,” if the employee:

  1. Is paid a minimum salary set by the FLSA; and
  2. Performs work that is considered a function of one of the FLSA exempt job categories or industries.

If an employee is properly classified as exempt, she is not entitled to overtime wages.

“White Collar” Exemptions & Common Examples of Misclassified Employees

Among the most-often claimed exemptions by employers are the “white collar” exemptions which include the executive exemption, the professional exemption, the administrative exemption, and the computer exemption. Only those employees whose job duties fit these narrow exemptions will be considered exempt from overtime compensation. Below is a brief overview of these overtime pay exemptions; for a detailed explanation, please see What is an Exempt Employee?

The Executive Exemption

The Executive Exemption refers to employees whose primary duty is management of the enterprise or a department of enterprise, who directs the work of two or more full time employees, who can hire and fire other employees, and who are paid on a salary basis of at least $684 a week.

Employers regularly misclassify team leads, line supervisors, assistant managers, shift supervisors, and foremen who do not meet each prong of the executive exemption.

The Administrative Exemption

The Administrative Exemption refers to employees whose primary duty is the performance of office or non-manual work directly related to the management or general business operations of the employer and whose primary duty includes the exercise of discretion and independent judgment with respect to matters of significance, and who are paid on a salary basis of at least $684 a week.

Employers regularly misclassify secretaries, paralegals, book keepers, and some human resources employees as administrative employees.

The Professional Exemption

The Professional Exemption refers to two types of professional employees – learned professionals and creative professionals. A learned professional’s primary duty requires the performance of work requiring knowledge of an advanced type in a field of science or learning customarily acquired by a prolonged course of specialized intellectual instruction. A creative professional’s primary duty requires invention, imagination, originality or talent in a recognized field of artistic or creative endeavor. Both types of professional employees must be paid on a salary basis of at least $684 a week.

Employers who classify certain types of employees as professionals, no matter how complex the job is, cannot use the exemption where a specific degree or course of education is not required to enter the field of work.

The Computer Exemption

The Computer Exemption refers to employees whose primary duty consists of: the application of system analysis techniques and procedures to determine hardware, software, or system specifications; the design, development, documentation, analysis, creation, testing or modification of computer systems or programs; or the design, documentation, testing, creation or modification of computer programs related to machine operating systems, and who are paid on a salary basis of at least $684 a week.

The computer exemption does not apply to all IT or information technology staff. Help desk employees who do not meet the above requirements, for example, are not exempt employees.

The Overtime Attorneys at Hawks Quindel Can Help You If You Have Been Misclassified

The experienced overtime attorneys at Hawks Quindel have assisted thousands of employees in recovering unpaid overtime pay, and are experienced in bringing both individual and class/collective actions for unpaid overtime compensation.

If you think you have been misclassified as exempt from overtime wages, or you want to learn more about your wage rights, Hawks Quindel’s wage and hour team will provide you with a free case evaluation to answer your questions and evaluate your potential claim.

Please contact us if you would like to discuss your wage rights under federal FLSA laws. Please call a Madison wage attorney directly at (608) 257-0040 or a Milwaukee wage attorney at (414) 271-8650, or email us via our Contact Page.

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