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.
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.
Lawsuits involving employee misclassification arise when an employer intentionally classifies an employee 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 non-exempt employees (overtime pay required). Exempt employees are usually salaried and are classified as management, professional, administrative, or outside sales. Non-exempt employees do not fall into these categories and make less than $684 per week, or less than $35,568 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 a lawsuit, include claims that construction workers, sales representatives, non-licensed engineers, technical writers, and other workers are professionals.