Misclassification Of Hourly And Salaried Employees
Hourly versus salaried employment, why does it matter? Under both the federal Fair Labor Standards Act (FLSA) and Washington state law, workers who work more than 40 hours in a workweek must be paid overtime. This applies to all workers, but there are several exceptions. Depending on the work that they do, salaried workers may be considered exempt from this overtime requirement. Overtime pay is time and a half. For employees whose workweek routinely exceeds 40 hours, the distinction can mean a significant loss in earnings.
An employee with a wage dispute or concerns about whether he or she should be paid overtime should consult with David C. Burkett, Attorney at Law. Located in Seattle, I have helped many employees throughout Western Washington recover overtime wages that were owed to them. To arrange for a free consultation, call me at 866-476-3138 or send me an email about your situation.
Misclassification of Hourly Employees as Exempt
One of the ways employees are deprived of overtime pay is misclassification of employees as exempt from FLSA overtime rules when they should be paid hourly. Employers may do this intentionally or accidentally. Inadvertent classification is usually due to confusion on the part of an employer about how an employee is classified. This can be an expensive mistake for employers, but it is not a defense.
Salaried Employees Entitled to Overtime: The Three-Part Test
Accepting a salaried position does not automatically exempt an employee from overtime pay. Whether an employee should be classified as exempt or not depends on a number of factors, including the duties they perform as part of their work.
While anyone questioning whether they should be paid overtime ought to consult with a wage and hour attorney, a simple three-part test will give employees a better idea of whether they should be paid overtime. Employees must meet all three criteria to be considered exempt:
- Minimum salary – For executives, administrative workers and other professional employees, Washington State requires a minimum salary of $13,000 for employees to be exempt from overtime pay. The minimum salary under the federal rules is $26,660. The federal minimum salary is being increased to $47,476 effective December 1, 2016, under rules recently promulgated by the Obama Administration. After December 1, 2016, there will be many salaried employees who will become entitled to overtime under federal law. Check with me to see if you qualify.
- Employer treatment – It is not enough to say that an employee is salaried to make an employee exempt. If an employer tells an employee that he or she is exempt but then pays the employee irregularly or deducts pay for taking personal time, then he or she is not being treated as a true salaried employee and may not be exempted from overtime pay requirements.
- Duties – The duties of the job itself, not the job title, dictate whether a position will be exempted from overtime pay. Generally speaking, an employee must be given discretion to exercise independent judgment about taking actions on behalf of the company.
Washington State labor rules surrounding overtime pay differ from federal FLSA rules. The rule that is most favorable to an employee is the rule that applies. There are also special rules for computer professionals and outside sales employees.
Liability for Failure to Pay Overtime
There are significant penalties for employers who fail to pay overtime. Employees who were denied overtime pay may recover back pay, interest as well as the cost of attorney fees for recovery efforts, and sometimes even punitive damages. In addition, the employer is obligated to pay back taxes and penalties to state and federal governments.
Talk to a Seattle Wage and Hour Lawyer About Your Salary Dispute
If you have a dispute with your employer about whether you should be paid overtime wages, please contact me to schedule a free initial consultation. Call me toll free at 866-476-3138 today.
I handle all wage and hour claim cases on a contingency fee basis as provided by Rule 1.5 of the Rules of Professional Conduct.