3 Signs of Employee Exempt Status Misclassification

Author: Mesriani Law Group
Posted on: December 1, 2020

California workers are categorized as either exempt or non-exempt employees.

State employment law requires employers to follow certain requirements regarding minimum wage, rest and meal breaks, and any other condition of employment with non-exempt workers. However, employers aren’t required to comply with those requirements for exempt workers.

Here are 3 signs that may indicate an employee is misclassified as exempt:

Minimum Salary Requirement 

Exempt employees are paid no less than minimum wage, even for part-time employees. The minimum salary requirement for exempt workers is not based on the number of hours worked. An exempt status worker must be paid double the minimum hourly wage (based on a 40-hour workweek), regardless of the number of hours the employee is scheduled to work.

For example, David works as a salesman for a clothing company. David works between 45 to 55 hours per week and makes a salary of $40,000 per year.

David’s salary of $40,000 per year is lower than the California minimum salary requirement for exempt employees in 2020. As of January 1, 2020, the minimum salary is $54,080 per year (or $1,040 per week) for employers with 26 or more employees. The minimum salary is $49,920 per year (or $960 per week) for employers with 25 or fewer employees.

Since David is paid less than the minimum salary requirement for exempt employees, he cannot be considered an exempt employee.

Hourly Pay Rate

Most exempt employees are not paid on an hourly basis. Generally, exempt employees are paid on a regular salary that isn’t tied directly to their hours worked. If an employer deducts wages from an employee for missing a couple of hours of work, the employee may be wrongfully classified as an exempt employee.

For example, Mary works as an assistant for an accounting office and gets paid a salary of $2,000 per week. Although Mary obtained permission from her employer to take 4 hours off every Friday to take a college class, her employer deducts the hours from her salary and pays her based on her hours of work instead of the job performed.

Since Mary’s employer paid her based on the number of hours work, she may be misclassified as an exempt employee.

Exempt Job Duties

To be considered an exempt employee, the worker must be primarily engaged in executive, or professional, or administrative duties. The worker must also regularly exercise independent judgment and discretion.

Even if an employee meets the requirements of an exempt employee, he or she may lose exempt status if his or her job duties change.

Damages for Misclassification

If an employer misclassified an employee as non-exempt, the employer may be responsible for unpaid wages. Damages may include unpaid overtime, unprovided meal breaks, unprovided rest breaks, liquidated damages, attorney fees, court costs, and interest.

Consult with our Misclassification Claim Lawyers Today

Many employers misclassify workers and violate California labor laws. If you believe you’ve been misclassified, don’t hesitate to contact our offices. We are confident that our experienced employment attorneys can obtain the maximum compensation for your case and offer a “no win, no fee” guarantee. Contact Mesriani Law Group today for your free legal consultation and let us help you get the justice you deserve.