Summary
Misclassifying employees as salary exempt is a common but serious compliance mistake under the Fair Labor Standards Act (FLSA). Employers must meet strict criteria when determining whether an employee is exempt from overtime, including salary basis, salary level, and job duties. Failing to properly classify employees can result in costly penalties, back pay, and legal risks. Understanding these requirements and proactively reviewing employee roles is essential to protecting your business.
What You’ll Learn
- What it means to classify employees as exempt vs. non-exempt under the FLSA
- The key differences between salary exempt and non-exempt employees
- The three FLSA exemption tests: salary basis, salary level, and duties test
- Why job titles alone do not determine exemption status
- Common scenarios where misclassification can occur (e.g., role changes, hybrid positions)
- The legal and financial consequences of misclassifying employees
- How back pay, penalties, and lawsuits can impact your business
- Why compliance is especially important as federal and state laws evolve
- How to properly evaluate employee roles and responsibilities for classification
- How HRDelivered can help you stay compliant with audits, reviews, and HR support