David Shulick is a lawyer who has extensive experience in employment law. This includes a thorough understanding of the Fair Labor Standards Act, which was established to create standards and guidelines for how employees are compensated based on their position within the company. It is a law that is enforced by the Wage and Hour Division of the Department of Labor.
One very common issue in FLSA law is when an employer misclassifies an employee by giving them a job title that is not reflective of their duties; thus enabling the employer to compensate that employee in a manner that is not reflective of the law. An example of such behavior would be classifying a cashier or other lower-level employee as a “manager.” In many cases, managers are exempt from things such as overtime pay because they are on a yearly salary. All too often employers are caught giving managerial titles to hourly workers as a means of masking their legal obligation to give overtime compensation to those workers.
In order to determine if the employee is exempt or non-exempt when it comes to benefits such as overtime pay, the Wage and Hour Division runs a test that helps narrow down the possible evidence of a misclassification. For example, most employees who make under $23,000 a year are non-exempt, although a number of exceptions can apply. Nonetheless, if the employee is paid on a salary basis, then they are to expect a guaranteed minimum with every pay check. But pay and terms aren’t the only factors that determine a misclassification. The FLSA provides definitions for executives, administrators and specialists that should be reflected in their daily duties. The broadness of these definitions is one of the reasons that misclassification cases are still occurring at the rate that they are. But with every case comes a new precedent that helps narrow these definitions.