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How exempt employee misclassification results in wage theft

On Behalf of | Feb 27, 2024 | Employment Law |

Wage theft comes in many forms, usually in unpaid or shorted salary, overtime pay and commissions. However, there is one type of wage theft that can easily be overlooked by any employee who is uninformed by the employment laws: the misclassification of employees as exempt.

How happens during the misclassification?

Exempt employee misclassification occurs when an employer incorrectly misclassifies workers as exempt employees, whom the law does not entitle overtime pay.

Under the Fair Labor Standards Act (FLSA), employers must pay nonexempt employees overtime pay for hours worked over 40 hours in a workweek. The same does not apply to exempt employees who usually hold positions earning a salary above a certain threshold and not in an hourly wage basis.

If an employer deliberately misclassifies an employee as exempt, the employee will not receive overtime pay the law legally entitles them to. Consequently, the employer will be in violation of the FLSA provisions and can be guilty of wage theft.

What are the consequences of this misclassification?

When employers intentionally misclassify employees to avoid paying overtime wages, and the court finds them guilty of the same, it can leave them owing back wages, taxes, fines and penalties.

Exploring your remedies as a misclassified employee

Employee misclassification can be an honest mistake, but some employers intentionally do it to save costs at the expense of their employees. If you believe your employer misclassified you as exempt, it is advisable to seek advice from a legal professional to know the available remedies to your situation and find ways to protect your employee rights.