Misclassified as Exempt: Unpaid Wages for Employees Wrongfully Classified as Exempt Employees under the Law

The Fair Labor Standards Act (FLSA) establishes nationwide minimum wage and overtime rules for employers. In general, an employee is entitled to be paid at least the minimum wage and receive overtime pay if he or she works more than 40 hours in a given pay period. But the FLSA also classifies certain employees as “exempt” from these requirements, meaning that certain employees are exempt from the federal minimum wage and overtime requirements.

Unfortunately, this is why some Florida employers try to skirt the system by improperly classifying non-exempt employees as exempt. The incentive to do so is obvious: Exempt employees do not have to be paid time-and-a-half for hours worked in excess of 40. But employee misclassification is a serious violation of federal and state law, and the affected employees have the right to seek any back pay and overtime wrongfully denied to them.

So, how do you know if you have been improperly classified as exempt? We provide some common signs below:

1. The employee’s duties primarily involve manual labor. The most common FLSA exemption is for “executive, administrative, and professional” employees. This exemption properly applies to individuals who largely perform office, supervisory, and non-manual work. If an employee’s work primarily involves manual labor, however, they are typically not exempt. For example, it is a common misconception that an employee is not entitled to get paid overtime because they are paid on a salary. Being paid on a salary, alone, does not provide for exempt status. Instead, there must be an examination into the work the employee is actually performing. Often times, we see positions like secretaries and assistants who are paid salary, but not paid for the overtime hours they work in excess of 40 (or who are not paid when they work through their lunch break). These can be signs of a potential misclassification.

2. The employee is paid an hourly wage. With a few exceptions, to qualify for an exemption, the employee must be performing proper job duties under the exemptions and also be paid salary. Currently, that salary must be at least $455 per week, regardless of whether the employee is considered full-time or part-time. However, if the employee is performing a job that falls into the exempt status, but is not paid a salary (and instead paid hourly), it could destroy the exemption, making the employee entitled to overtime payments.

3. The employee has a managerial title with no real authority. Some employers think they can classify a worker as exempt simply by giving them a title, e.g. “assistant manager.” But at least to qualify for an EAP exemption, the employer needs to do more than hand out inflated titles. An exempt employee must have some real executive authority, such as the ability to hire and fire other employees. Indeed, according to the U.S. Department of Labor, an exempt executive employee must regularly supervise “at least two or more other full-time employees or their equivalent.”

4. The employee handles sales from the corporate office. There is a separate FLSA exemption for “outside sales” employees, i.e. traveling and door-to-door salespeople. But this exemption does not apply to employees who primarily conduct sales out of the employer’s normal business office (think Jim and Dwight from “The Office.”) The mere fact insides salespeople may work on commission does not automatically make them exempt under the FLSA.

What Should Misclassified Employees Do?

If you have been misclassified as exempt by your employer, you may be entitled to back pay, particularly if you worked more than 40 hours during one or more pay periods and did not receive the legally mandated overtime rate. If you need to learn more about your rights under the law, contact a qualified Florida employment law attorney right away.