Exempt or nonexempt? Analyze your staff before a court does

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in Employment Law,HR Management,Human Resources,Leaders & Managers,Management Training

When a new position is created, HR professionals typically make a snap decision on a vital issue: whether the person filling it should be deemed exempt from the Fair Labor Standards Act (FLSA)—i.e., they’re not eligible for overtime pay—or whether they’re nonexempt—i.e., eligible for time-and-a-half overtime pay.

In many cases, that’s the last time the exempt-versus-nonexempt decision is ever reviewed for that employee. Not smart. Employee responsibilities can change over time. An exempt “assistant manager” can find himself doing the same duties as nonexempt rank-and-file workers. He’ll ask himself (and his lawyer) why he can’t earn overtime, too.

If a court says an employee is misclassified, the FLSA allows the worker to earn back pay reaching back two years (three if the violation is “willful”).

The U.S. Labor Department issued regulations in 2004 that aimed to simplify the rules regarding how employers decide who is e...(register to read more)

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