Welcome back to the second half of our two-part article on how employers have misused the ‘exempt’ employment classification. Not all employers understand the rules for exempt employees, and many try to exploit the situation and actively defy employment law. Last time, we focused primarily on how employers cannot dock your pay under (almost) any circumstances. Even if you come in late, even if you work less than 40 hours, even if you make a mistake on the job.
Join us today as we pick up where we left off with exempt status requirements and how employers can void that status by mistreating employees.
Reduce Your Salary Below the ‘Exempt’ Level
The one way an employer can reduce your pay is to fully reduce your contractual salary. This has been a method used in the past, but by lowering your salary they may place you back in the realms of non-exempt. Remember, an exempt employee has to make over $43,680 per year ($840/wk) to qualify for the ‘no overtime’ and guaranteed salary rules. Anything that takes you below that amount (including covering certain expenses like travel or party planning) will automatically make you non-exempt.
If a pay cut, in particular, takes you down below exempt status, you are now qualified to collect overtime pay at time and a half. However, because this is a contractual change to your role, this non-exempt transformation does not include back-pay for overtime worked while your pay was higher. If the drop in pay was due to expenses, this falls under the same rules as docking your pay.
Revoke Your Decision-Making Duties
Exempt employees must have a certain degree of independence and discretion in their work. In other words, they must be decision-makers who mostly decide their own schedules and take personal responsibility for their projects. Doctors and lawyers, managers and creatives are likely to be considered exempt based on their duties because they have authority and control their own work tasks. Where secretaries, clerks, and non-manager team members almost never qualify as exempt because they are managed and daily tasks are assigned to them.
So if your employer decides to revoke your freedom, managerial status, or discretion-based duties, you may no longer be considered exempt. Interestingly, how you are treated by your boss can also influence this. If you are micro-managed, you probably don’t count as exempt even if you would be with a more hands-off boss.
Misclassify You as Exempt or Non-Exempt.
Finally, there are many employers who try to ‘save money’ by defining all their salaried workers as exempt. This, frankly, is illegal and a disservice to everyone who has been misclassified. It is usually used as a way to work employees hard, then deny them overtime pay instead of offering the privileges of rank, freedom, and income stability.
So if you don’t make more than the minimum exempt salary, don’t have control over how you use your time at work, or your employer has ever docked your salaried pay, you are not actually exempt. And your employer probably owes you overtime back-pay for any weeks you worked more than 40 hours.
Have you been mis-classified as exempt or mistreated as an exempt employee? You don’t have to take this callous (or possibly mistaken) mistreatment lying down. If speaking to your manager and HR hasn’t resolved the problem, or if your employer refuses to pay out your rightful overtime back-pay, you have options. Here at Aiman-Smith and Marcy, we specialize in employment law and forcing employers to face the consequences for their actions. Mistreatment of the exempt employee status is a serious legal violation, one that many employers use to take advantage of their staff. Let us help you hold your employer accountable. For a consultation on your personal situation, contact us at Aiman-Smith & Marcy today. We’re always ready to help.