Many times, employers only think of misclassification in terms of an employee v. independent contractor scenario. Well, an important type of classification employers must also keep in mind is determining whether or not an employee is an exempt v. non-exempt employee. This determination is crucial as failing to properly classify an employee can expose you to significant liability.
Now you may be wondering how do you determine if an employee is actually exempt or non-exempt?
Many times, employers think that an exempt employee is an employee who gets paid on a salary basis and that is the only factor. Well, that is not the case! In order to be considered exempt an employee must make a salary that is at least two times the California minimum wage based on a 40-hour workweek and fall into one of the exemption categories, either: 1) Professional; 2) Administrative; or 3) Executive Exemption.
If an employee does not meet the salary requirement and/or does not fall into any one of the exemption categories, then an employee should not be considered exempt. Undergoing this analysis of whether or not an employee meets one of the exemption categories is a detailed factual and legal analysis that should be done in consultation with an experienced labor law attorney.
Misclassifying an employee as exempt may expose an employer to claims of unpaid overtime, meal period & rest break violations, and many other claims! Given the substantial risk that occurs due to misclassifying an employee, it important for employers to audit their employee classifications at least yearly with the help of legal counsel. To learn more about employee classification and whether you have properly classified your workforce and for assistance in this legal analysis, contact your Employer Lawyers at Chauvel & Glatt.
This material in this article, provided by Chauvel & Glatt, is designed to provide informative and current information as of the date of the post. It should not be considered, nor is it intended to constitute legal advice. For information on your particular circumstances, please contact Chauvel & Glatt at 650-573-9500 for legal assistance near you. (Photo Credit depositphoto.com.)
