Improperly Classifying Employees as Exempt Can Lead to Serious Fines from the Department of Labor

The hot topic of discussion around the water cooler in workplaces today is the Department of Labor (DOL)’s proposed overtime rule change. While you may have heard about potential changes to the law, do you truly understand how it could affect your employees and your business?

All employers are required to classify jobs as either exempt or non-exempt. The first place to begin is to determine whether you are classifying your employees properly. Misclassifying employees can cause confusion for both workers and employers, and not knowing the difference between these two categories could cost you a lot of money.

The Fair Labor Standards Act (FLSA) mandates that most employees in the United States be paid at least the federal minimum wage for all hours worked and overtime pay for working more than 40 hours per week. However, the FLSA provides an exemption from both minimum wage and overtime pay for individuals who are employed as bona fide executive, administrative, professional, outside sales, certain highly compensated employees and certain computer employees. There are also exemptions for specific types of workers in unique industries.

Job titles do not determine exempt status. In order for an exemption to apply, an employee’s specific job duties and salary must meet all the requirements of the DOL’s regulations. 

Contact Sullivan Group HR and let us help you understand these requirements and protect your business from unnecessary fines.

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