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Labor and Employment

Misclassified Employees Cheated Out of Overtime Pay

This Alert Affects:

Employees who are misclassified as exempt workers who do not receive overtime compensation may have a case.

Employees can lose time-and-a-half pay for hours worked over 40.
Additional Details
Misclassifying employees is a scam some employers use to avoid paying overtime. While some employers misclassify workers unknowingly, others do so intentionally.
Workers may recover up to two years of lost wages. If the employer intentionally misclassified the employee, he or she may recover up to three years of unpaid overtime.

Misclassified Employee Lawsuits arise when an employer intentionally classifies an employer incorrectly, in order to avoid paying overtime wages. Clearly, this practice violates labor laws, is deceptive, and unethical.

When it comes to wage and hour laws, there are two types of employees: Exempt employees (do not need to be paid overtime) and Nonexempt employees (overtime pay required). Exempt employees are usually salaried and are classified as management, professional, administrative, or outside sales. Nonexempt employees include the rest of the employee spectrum, who receive hourly pay and make less than $455 per week, or less than $23,660 per year.

In order to avoid paying overtime, employers will sometimes classify an employee as management, when the employee does not in fact manage anyone. State laws clearly outline what it means to be a manager (for example, in California, to be a manager, an employee must manage at least two people and more than 50% of his or her work must be managerial). Other common misclassifications, which may be grounds for employee misclassification litigation include the claims that construction workers, sales representatives, non-licensed engineers, technical writers, and other workers are professionals.

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Case Resources

Rummel v. Highmark, Inc. Complaint
Case number 3:13-cv-087, U.S. District Court for the Western District of Pennsylvania
Overtime Pay Requirements Under the Fair Labor Standards Act (FLSA)
The U.S. Department of Labor's (DOL) fact sheet on federal overtime pay laws.
Employees Exempt from the Fair Labor Standards Act (FLSA)
The U.S. Department of Labor's (DOL) fact sheet on employees who are exempt from the FLSA.