Are you an independent contractor? An executive? Professional? Why does the category or classification your job falls under matter to you? It matters because the classification can determine the legal rights you have under the many laws that apply to employment and wages.
The Fair Labor Standards Act (FLSA) is the federal law that sets forth the rules and regulations that govern wages and hours in our country. States may also have laws that address wages, but state laws may not take away any of the rights that the FLSA bestows on workers. States can provide more protection and broader rights, and whichever benefits the workers most is the law that governs any given situation.
For example, the FLSA sets a national minimum wage. States may establish higher minimum wage rates, and many have, but may not set a minimum wage that is lower than the FLSA.
The FLSA also sets the rules for overtime pay. The FLSA states that employees must receive wages at one and one-half times their regular rate of pay for every hour they work over 40 in a given workweek.
The FLSA applies to employees. If you are not an employee, the FLSA does guarantee your rights to either overtime pay or minimum wage. Even if you are an employee, you may fall into one of the FLSA’s narrow exemptions that render you ineligible for overtime. For these reasons, many employers attempt to “misclassify” workers. In other words, to avoid the legal obligation to pay overtime and minimum wage, employers refuse to acknowledge that their workers are employees and try to “exempt” employees who would otherwise be eligible. Let’s take a closer look at misclassification.
Only employees are entitled to overtime and minimum wage under the FLSA. Independent contractors are “exempt” from the FLSA. Sometimes employers call employees independent contractors just to avoid providing benefits and paying minimum wage and overtime. The issue is whether there is an employer-employee relationship between the parties. An “economic realities” test is used to determine if the workers are truly employees. Considerations, according to the US Department of Labor, include factors like:
An independent contractor is not an employee, and an employer does not have to pay him or her overtime or minimum wage. When an employee is misclassified as an independent contractor, the individual may seek to recover unpaid overtime by filing a claim against the employer.
Another form of misclassification occurs when a worker who is an employee (this aspect of their classification is not an issue) gets categorized as a professional, executive or administrator who is exempt from overtime. This worker may receive other benefits because he or she is an employee, but is not paid for overtime.
Employers often try to misclassify staff as exempt employees to save money on overtime costs. However, it takes more than just a job title to make you exempt from something as important as overtime pay. To be a truly exempt employee, the FLSA requires that you earn a certain salary AND pass a “duties” test.
If you are paid a salary as opposed to paid hourly and are labeled a “salaried” employee, your employer may tell you that you’re not eligible to receive overtime. Not true! You can potentially be exempt only if your salary is above a certain amount. Even then, you must pass the second round of tests.
Salary Test: Under the FLSA, if you earn a salary and it is less than $455.00 per week, you are entitled to overtime pay. In New York, the salary amount is higher depending on where in our state you work and the size of the business. If you earn at least $455.00 per week, you are not automatically exempt. You must fall into one of the specific exempt categories of professional, administrative or executive.
Duties Test: If you meet the salary requirement, to be exempt, you must also satisfy the duties test. There are separate tests for each of the administrative, professional and executive exemptions. Each includes “primary duties” that the individual must perform to meet the particular exemption.
One thing is clear for each category; the job title is not relevant. For example, if you work as an “administrative assistant” you are not automatically exempt from overtime under the administrative exemption. Only if your primary duty “includes the exercise of discretion and independent judgment with respect to matters of significance” are you exempt. So if you earn $500.00 per week as an administrative assistant, but your primary duty is typing and answering phones, you may be entitled to overtime.
If you are a misclassified worker, you have rights. Contact employment law attorneys at Leeds Brown Law, P.C. to find out how you can collect your unpaid overtime and other wages your employer owes you. If you work in New York City, on Long Island or in one of the surrounding counties, Leeds Brown can help you navigate a claim against your employer for misclassification and unpaid wages. Don’t wait, call New York employment lawyers 24/7 at 1-800-585-4658.
For more US Department of Labor guidance on FLSA exemptions go to