Q. Let’s say I do the payroll for a company and know that we are misclassifying employees (exempt vs. nonexempt; independent contractors vs. employees). And let’s say I advised the owner, but he chose to leave it as is. Could I be held liable as the payroll administrator? — Anonymous
A. Under the Fair Labor Standards Act () and certain state laws, individuals involved in making classification decisions can be personally liable for misclassifications. The FLSA defines “employer” broadly to include “any person acting directly or indirectly in the interest of an employer in relation to an employee.” (29 U.S.C. §203(d))
Whether you could be held liable likely depends on your role in determining the classification and your role within the company.
For a checklist to help you make the decision of exempt or nonexempt, go to www.theHRSpecialist.com/checklist.
- Celebrate National Employee Benefits Day, April 2
- Independent contractor alert: Feds on the lookout for misclassification
- Company Records: What to Keep, What to Dump
- Fight unemployment benefits if employee quits because of unsubstantiated safety fears
- Audit wages and salaries to identify hidden sex bias