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Exempt vs. Non-Exempt Employee: Which Are You?

When you are working as an employee, you are one of two types: exempt and non-exempt. Often employers will attempt to misclassify an employee to save on their bottom line. It is important to know the difference. How do you know which category you fall into? The answer is simple, and it could have significant financial implications if you have been misclassified. Here is a brief overview of how to know if you may be misclassified as a exempt employee. If you have any questions regarding your status, it is always best to get the advice from a trusted employment attorney.

Exempt Employees

If you are considered an exempt employee, then you are not entitled to overtime pay. These employees are paid a salary and are required to perform executive, administrative, or professional duties. They must also be regularly able to exercise discretion and independent judgment on the job. California law requires employers to pay a salary that is at least twice the minimum hourly wage based on a 40-hour workweek. As of January 2019, the amount would be $43,680 per year. Exempt employees are not entitled to rest breaks, meal breaks, and overtime pay.

Non-Exempt Employee

Non-exempt employees are generally paid hourly, or their salaries don’t fall under exempt status. You may be considered non-exempt if more than 50% of your daily activities include the types of duties that are typically paid on an hourly basis. This can include waiting tables, construction, fast food service, etc. Non-exempt employees are eligible for overtime, rest and meal breaks, and must be paid at least minimum wage. Occasionally it is not always clear to an employee that they should be non-exempt. This is where it is crucial that you talk to an employment attorney who can help determine if you have been misclassified.

What If I Have Been Misclassified?

Some employers purposefully misclassify employees as exempt to cut financial corners. Employers may have employees work more than 8-hour days or 40-hour weeks without extra pay, not providing adequate lunch or rest breaks, and not tracking employee hours. There can be substantial penalties for businesses that misclassify employees in violation of California’s labor laws and the Fair Labor Standards Act (FLSA).

You cannot be fired or retaliated against if you report a labor violation. Any threat of disciplinary action, reduction in pay, or termination related to the report is wrongful termination. If an employer is found to have wrongly classified you as exempt, you may be entitled to damages for unpaid overtime, meal or rest breaks never provided, and attorney and court’s fees.

If you think you have been misclassified as an exempt employee or have been retaliated against because of reporting this misclassification to your employer, you need to speak with an attorney immediately. Contact the Law Offices of Tanya Gomerman at 415-545-8608 to schedule a FREE consultation to discuss your case.

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