The Fair Labor Standards Act (FLSA) establishes minimum wage and overtime pay eligibility for employees in the private sector and in federal, state, and local governments. One of the common ways employers violate the FLSA is through the misclassification of employees as exempt from overtime pay.
Under the FLSA, employees are entitled to overtime at a rate of 1.5 times their regular rate of pay for all hours worked over 40 in a workweek. However, certain employees are not entitled to overtime pay. The major categories of exempt employees under the FLSA are:
- Executives — Those who manage a business or department, supervise at least two employees, and have hiring/firing authority
- Administrators — Workers performing office or non-manual tasks related to business operations, requiring independent judgment
- Professionals — These include learned professionals (e.g., doctors, lawyers, engineers) and creative professionals (e.g., artists, writers, musicians)
- Computer workers — Certain IT professionals, including software engineers and systems analysts
- Outside salespeople — Those primarily engaged in sales outside the employer’s place of business
Exempt workers in the executive, administrator, professional, and computer categories must be paid on a salary basis at not less than $684 per week.
Misclassification occurs when an employer incorrectly categorizes an employee as exempt, thus denying them overtime pay. This can happen in several ways:
- Misunderstanding the duties test — The exemption status of an employee largely depends on their actual job duties, not just their job title. For instance, an employer might classify a worker as an administrative exempt employee because they perform office work. However, if the employee does not regularly exercise discretion and independent judgment on significant matters, they should not be classified as exempt.
- Salary basis test failure — Some employers might pay an exempt employee less than the required salary threshold or deduct from their salary for partial-day absences, which can lead to a violation of the salary basis test and thus misclassification.
- Improper deductions — Making deductions from an employee’s salary for reasons such as shortages in the cash register, penalties for lateness or costs of damage to property can result in loss of the exemption.
Some misclassifications occur in gray areas. For example, a tech company might classify its software developers as exempt, assuming that all tech roles meet the professional exemption. However, some developers do not primarily perform work that requires advanced knowledge or creativity as defined by the FLSA, so their classification is suspect. Another example is a retail store manager being classified as within the executive exemption. However, the manager spends a significant part of their time performing non-managerial tasks, such as stocking shelves and operating cash registers. As such, they may not meet the exemption criteria.
If you believe your employer has misclassified you and is wrongfully denying you overtime, you can file a complaint with the US Department of Labor’s Wage and Hour Division, which enforces the FLSA, or you can initiate a private lawsuit against your employer. A Georgia wage and hour lawyer can assist you in pursuing your rights.
Your remedies can include back pay, which is overtime wages earned but not paid. You may be entitled to back wages for up to two years before filing the complaint and up to three years for willful violations. In addition, you may be entitled to liquidated damages, which essentially means doubling the amount of back pay you are owed. You also may be able to recover reasonable attorney’s fees and court costs.
The Reddy Law Firm, P.C., in Alpharetta, represents clients throughout Georgia in conflicts concerning overtime pay and other wage disputes. Call 678-629-3246 or contact us online to schedule a free consultation with an experienced employment attorney.
