Salaried and hourly employees both have rights, and there are advantages and disadvantages to both types of employment. Unfortunately, some salaried employees end up working long hours with no overtime pay and relatively low salaries for the number of hours they put in each week. It is important for workers be aware of the rights and protections provided under the law for both hourly and salaried employees.
Who Qualifies as an Hourly or Non – Exempt Worker?
Non-exempt workers are paid an hourly wage. Under the Fair Labor Standards Act (FLSA), they must be paid at least the minimum wage and overtime for hours in excess of 40 hours per week. Overtime is paid at a rate of one-and-a half times the regular rate.
Most workers receiving an hourly wage are non-exempt employees. There are certain requirements under the law for workers to be classified as exempt. Those positions that do not qualify as exempt are classified as non-exempt positions.
Who Qualifies as a Salaried or Exempt Worker?
Exempt or salaried workers are not protected under FLSA and not eligible for overtime pay. Some types of jobs are automatically exempt under the law. However, in most cases, to be classified as exempt, employees must meet the following qualifications:
- Make a minimum of $23,700 a year (a threshold that may soon to be raised to $50,400).
- Paid on a salary basis.
- Perform job duties in the exempt category.
According to the ADP Guide to FLSA Rules Regarding Exempt/Nonexempt Employees, seven major professional categories are recognized by FLSA as exempt: executives, administrative employees, learned professionals, creative professionals, computer employees, highly compensated employees and outside sales employees. Workers who fall into these categories and meet certain tests may be considered exempt. Regardless of job title, exempt employees tend to have relatively higher level duties in a company’s overall operations.
Exempt and Non – Exempt Workers have Different rights
There are advantages to being paid by the hour, including:
- Overtime at time-and-a-half for every hour over 40 hours worked in a week.
- A guaranteed dollar amount for every hour worked.
- Double the hourly rate on holidays at some employers.
- Non-exempt positions generally have a set number of hours per week.
The downside is you get a smaller paycheck if your hours are cut back or the business closes early (except for paid holidays, and sick, vacation or personal leave days or hours).
Exempt employees have benefits as well:
- Salaried positions are often higher status and higher pay
- Exempt employees are guaranteed a certain amount per paycheck.
- More perks are offered to salaried employees in some companies.
The main disadvantage for exempt employees is that they are not entitled to overtime if the job requires them to work more than 40 hours per week or holiday pay if their duties require them to work on holidays.
Misclassification of Employees
Non-exempt employees are entitled to overtime pay, which they do not receive if they are misclassified by employers as exempt. According to a TriNet article, when employers misclassify workers, it is the erroneously classified exempt workers who suffer financially and often work longer hours.
Administrative employees are in a commonly misclassified professional category. Under FLSA, exempt administrative employees perform non-manual or office work that is directly related to management or general business operations, which involves the exercise of independent judgment and discretion about matters of significance as a primary component of the job. Simple clerical work does not fit in this category and does not qualify for exempt status.
Employers have been known to take advantage of workers by classifying them as exempt, paying them relatively low salaries (at a minimum of $23,700 a year) and requiring many extra hours as an expected part of their job duties with no overtime pay. This wrong is compounded when those employees are not legally eligible to be classified as exempt in the first place.
Non-exempt workers who are classified by employers as exempt, intentionally or unintentionally, or hourly employees whose hours off the clock are not recorded and compensated as they should be may be entitled to file claims under FLSA with the U.S. Department of Labor.
Our Long Island Employment Attorneys help Misclassified Workers get back Wages
If you are owed back pay because your employer misclassified you as an exempt employee, the Law Office of Cohen & Jaffe, LLP can help. Our Long Island employment attorneys are well-versed in employment and labor law and we are committed to protecting the rights of workers.
If you have been denied overtime pay you were legally entitled to receive under FLSA, our Long Island employment attorney will thoroughly investigate the circumstances and aggressively pursue a claim on your behalf. Contact us online or by telephone to arrange for a free case evaluation.
- ADP: Exempt or Nonexempt Employees: Who’s Who, and Why Does It Matter?
- TriNet: Exempt or Non-Exempt? A Loaded (and potentially costly!) Question
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