It’s quite common for employers to misclassify their employees. Often, an employee may feel they are classified incorrectly and should be a non-exempt employee (hourly), rather than an exempt employee (salary) because they are working long hours and not being paid overtime. When this is the case, an employee may feel taken advantage of by his or her employer because they are working so much but may not be compensated properly. So the question that must be asked is what does exempt and non-exempt mean? And how are they different?
The FLSA (Fair Labor Standards Act) and California law on wages, meal and rest breaks, and overtime pay does not apply to salaried exempt employees, but it applies to hourly non-exempt employees. An exempt employee is one who is paid a salary. An exempt employee does not keep track of the hours he or she works and thus does not get paid overtime. A non-exempt employee is one who is paid hourly, thus a non-exempt employee will keep track of the hours he or she works and will be entitled to compensation for working overtime hours. Therefore, in California, a non-exempt employee must be paid overtime if he or she works more than 8 hours in a day or 40 hours in a week.
To determine if someone should be an exempt or a non-exempt employee, the court will consider various factors. However, the ones worth mentioning are whether the employee has discretion and independent judgment to act on behalf of the employer, and/or whether the employee has managerial functions and is overseeing employees. If the employee has independent discretion to make important decisions on behalf of his or her employer, there is a likelihood that he or she is classified properly as a salaried exempt employee. Or if the employee’s position is managerial and he or she oversees employees, including hiring and firing, then there is also a likelihood that he or she is properly classified as an exempt employee. However, this test is not exhaustive and there are many more factors that come into play. If you feel you are misclassified, call our firm today to find out. Or you can visit our misclassification page for more information.