Misclassifying Employees As Exempt Violates Federal Law
Federal law sets forth some basic guidelines concerning minimum wage and overtime pay. Specifically, the Fair Labor Standards Act (FLSA) provides two key provisions that impact just about every employee who works for a wage. First, the FLSA requires that workers be paid minimum wage, currently $7.25 hour. Additionally federal law requires employers pay all non-exempt workers at a rate of one and one-half their regular rate of pay for all hours worked in excess of 40 hours in any workweek.
These simple sounding rules lead to significant problems and confusion – especially when employers try to deny employees all the compensation they are entitled to by misclassifying non- exempt employees as exempt.
In a recent case out of Texas, American Airlines Federal Credit Union agreed to pay tellers, loan officers and customer service representatives over $80,000 after an investigation determined that the Credit Union violated the FLSA’s overtime provisions. Reports indicate that the credit union improperly classified its salaried employees as exempt, paying them “straight-time” wages rather than time and a half as required by the FLSA. The credit union also failed to maintain accurate records.
Determining whether you are exempt can be confusing. Exemptions are rules stating that if you make more than a certain amount of money or do a certain type of “white collar” work, your employer doesn’t need to pay you time and a half no matter how many hours you work in a week. If the exemptions don’t apply to you, then you are entitled to time and a half for every hour you work more than 40 in any workweek. Whether you are exempt is determined by the nature of work you do – rather than the title or label of your job.
Here, rather than evaluating each employee’s classification, the credit union determined all salaried employees were exempt, violating the provisions of the FLSA.
For more information, or if you believe you have been denied all the overtime pay you are entitled to, contact the experienced Atlanta wage and hour lawyers at Buckley & Klein, LLP.
