Misclassification of Employees: Exempt Vs. Non-Exempt
Employers can save significant amounts of money by classifying employees as “exempt” and thereby not having to pay them overtime. Unfortunately, many employers misclassify employees for that reason — taking advantage of their employees’ hard work to avoid paying overtime wages. An independent contractor lawyer from Bohrer Brady understands that your employee classification is based on what you actually do, not your job title.
Exempt employees are paid a salary. Non-exempt employees are paid an hourly wage. Common examples of exempt positions include managers, professionals, administrators and other positions in which the employee manages the work of others, interprets company policy or has authority over his or her work.
Non-exempt employees are typically supervised and are charged with such duties as:
- Producing products
- Operating machinery
- Administrative work
- Making deliveries
- Driving vehicles
- Running a cash register
Oftentimes, companies will give an employee a title such as “assistant manager” and classify that employee as exempt. If the employee does not obtain any real managerial responsibilities and remains responsible for activities similar to those named above, it may be a case of misclassification and that employee may be owed unpaid overtime wages.
If you think your employer may be exploiting you through employee misclassification, a Bohrer Brady independent contractor lawyer can help you explore your rights and options.
Independent Contractor Misclassification: Employee vs. Not an Employee
Workers mislabeled as independent contractors are entitled to overtime pay under the Fair Labor Standards Act (FLSA). The question is whether you are truly “independent,” or whether you are an actual employee of the company. Employees are entitled to overtime, “independent contractors” are not.
An “independent contractor” is a person engaged in his own business. An employee is one who “follows the usual path of an employee” and is dependent on the business that he serves. There is no simple answer to whether a person is an employee or an independent contractor. Each contractor misclassification situation requires a factual analysis. The Economic Reality Test gives some guidance on whether a person is an employee or an independent contractor:
- If and how much of your work is a major part of the employer’s business?
- Do you play an integral role in the business? Do you perform the primary type of work that the employer performs?
- How long and how permanent is the relationship between you and your employer?
- How long have you worked for the same company?
- What is your investment in facilities and equipment of the business?
- Are you reimbursed for expenses, tools, supplies, etc? Do you use your own tools or equipment?
- How much control do you have over your hours and the work you do?
- Who decides the schedule? Who is responsible for quality control? Do you work for any other company? Do you have a separate business site
- What opportunities are there for you to benefit from profits or take on loss
- Do you purchase your own insurance or bonding? Can you earn a performance bonus?
- How much skill do you need to perform the job?
- Does the position require little or no training, or is the position highly skilled?
If it is found that a business exercises sufficient control over the worker and thus an employer-employee relationship exists, the worker is entitled to the protections under the FLSA, including overtime pay for every hour worked over 40 in a work week.
Speak to an Independent Contractor Lawyer
If you believe you may have been involved in employee misclassification as an independent contractor, call Bohrer Brady for a free consultation. We will listen to your concerns and provide honest and informed feedback and help you determine whether or not you have a case.
Contact an Independent Contractor Lawyer at Bohrer Brady LLC
Contact us today to arrange a free consultation with an experienced independent contractor lawyer at Bohrer Brady LLC. We represent clients nationwide under federal law.
Se Habla Español.