Twelve Common Errors in Overtime Pay: Misclassification

Kevin D. Fitzpatrick, Jr. : February 20, 2012 12:56 pm 

The Fair Labor Standards Act (FLSA) establishes minimum wage, overtime pay, record-keeping and youth employment standards for workers in the private sector and government.  Covered non-exempt workers are entitled to overtime pay of at least 1.5 times regular pay if they work more than 40 hours per week. 

The first problem area: 

1.Misclassification of a worker’s position T

here are three “white collar” exemptions to overtime pay: serving in a bona fide “executive,” “administrator” or a “professional” capacity. Simply calling an employee’s position “executive” or an “administrator” does not establish exempt status unless the “primary duty” of the position is to perform certain white collar administrative or executive functions.  FLSA exemptions are always defined by what you do, not what you are called. 

The law sets out a list of factors to help determine whether an employee’s primary duty is the performance of exempt work.   Considerations include the relative importance of exempt duties; the amount of time spent performing exempt work; an employee’s freedom from direct supervision; and the relationship between the employee’s salary and the wages paid to other employees. Misclassification often occurs in retail chains where the “manager” spends the majority of his work time performing non-exempt work – unloading trucks, stocking shelves and waiting on customers.  Although the “manager” may spend an hour or so each day filling out forms, the real “management” of the store is handled at corporate headquarters.  Courts often find that these “managers” are actually non-exempt employees who are entitled to the overtime provisions of the FLSA. I

f you are an employer or an employee and have questions about the Fair Labor Standards Act, call the FLSA experts at DeLong, Caldwell, Bridgers, Fitzpatrick, & Benjamin, LLC, Charles Bridgers and Kevin Fitzpatrick, at (404) 979-3150 for a free consultation.  For more information, check out our publication,  Are You Entitled to Overtime Pay?