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Classification of Exempt and Nonexempt Employees

Is Your Business Classifying Exempt Employees Correctly?

Correctly classifying employees as exempt or nonexempt is critical when it comes to complying with wage and hour laws. Nonexempt employees are entitled to overtime pay for hours worked in excess of 40 in a week. Exempt employees are not.

At Key Harrington Barnes PC, our attorneys represent employers in class action lawsuits concerning violations of wage and hour laws. However, we would rather help your company avoid litigation by classifying workers correctly. Based in Dallas, we advise employers throughout Texas.

What is an Exempt Worker?

In most cases, employees are considered exempt or nonexempt based on:

  • Amount of pay: Exempt workers are paid at least $23,600 a year.
  • How the employee is paid: Exempt workers are paid a salary. (However, not all salaried workers are exempt.)
  • Job duties: Workers are considered exempt if they perform exempt job duties. Exempt employees generally include executive, professional and administrative positions. It is the actual duties, not the job title, that determine whether an employee is exempt.

Some positions are classified as exempt or nonexempt by definition. For example, an outside sales position is exempt, while an inside sales position is nonexempt. However, many employers err by defining sales positions as "outside" even though employees sell primarily by phone or over the Internet.

Most employers make a good faith effort to follow the law when determining which job positions are exempt from the Fair Labor Standards Act requirement to pay overtime. However, the cost of misclassification can be staggering. You could face civil penalties, double damages and plaintiff attorney fees. The cost of seeking legal advice is small compared to the cost of a class action lawsuit.

For Help in Classifying Workers as Exempt or Nonexempt

To avoid costly litigation over misclassification of workers as exempt from the requirement to pay overtime, call our Dallas lawyers at (214) 615-7925 or send us an email using our contact form.

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