Exemption Misclassification

Employers commonly make mistakes about which employees are “exempt” from overtime and minimum wage laws. Just because you receive a salary does not mean you are not entitled to overtime pay. Contact Tim to discuss whether your employer may have misclassified you and owe you additional pay.

Think You Have Been Misclassified? Tim Can Help.

The federal Fair Labor Standards Act generally requires that employees earn at least minimum wage, and receive overtime pay for hours worked over forty, unless they fall within one of the “exemptions” from those requirements.

The most common exemptions are the so-called “white collar” exemptions for executive employees, administrative employees, learned professionals, creative professionals, highly paid employees, certain kinds of computer employees, certain kinds of outside salespeople, and some employees of retail or service establishments.

The requirements for these exemptions can be complicated, turning on an analysis of job duties and other factors, and employers frequently make mistakes in applying them. This can result in employees being denied overtime pay or minimum wages required by the law. For example, employers sometimes assume that paying a salary necessarily means the employee is not entitled to overtime compensation, or that all sales employees are exempt from the overtime and minimum wage requirements.

Executive Employee Exemption

  • You are compensated on a salary basis at a rate not less than $684 per week;
  • Your primary duty is managing the enterprise or managing a customarily recognized department or subdivision of the enterprise;
  • You customarily and regularly direct the work of at least two or more full-time employees or their equivalent;
  • You have authority to hire or fire other employees, or your suggestions and recommendations as to hiring, firing, advancement, promotion or any other change of status of other employees must be given particular weight.

Learned Professional Employee Exemption

  • You are compensated on a salary basis at a rate not less than $684 per week;
  • Your primary duty is the performance of work requiring advanced knowledge, defined as work which is predominantly intellectual in character and which includes work requiring the consistent exercise of discretion and judgment;

Creative Professional Employee Exemption

  • You are compensated on a salary basis at a rate not less than $684 per week;
  • Your primary duty must be the performance of work requiring invention, imagination, originality or talent in a recognized field of artistic or creative endeavor.

Outside Sales Employee Exemption

  • Your primary duty must be making sales, or obtaining orders or contracts for services or for the use of facilities for which a consideration will be paid by the client or customer;

  • You must be customarily and regularly engaged away from the employer’s place or places of business.

Administrative Employee Exemption

  • You are compensated on a salary basis at a rate not less than $684 per week;
  • Your primary duty is the performance of office or non-manual work directly related to the management or general business operations of your employer or your employer’s customers;
  • Your primary duty includes the exercise of discretion and independent judgment with respect to matters of significance.

Computer Employee Exemption

  • You must be compensated either on a salary or fee basis at a rate not less than $684 per week or, if paid on an hourly basis, at a rate not less than $27.63 an hour;
  • You must be employed as a computer systems analyst, computer programmer, software engineer or other similarly skilled worker in the computer field performing the duties described below;
  • Your primary duty must consist of:

    (1)  The application of systems analysis techniques and procedures, including consulting with users, to determine hardware, software or system functional specifications;

    (2)  The design, development, documentation, analysis, creation, testing or modification of computer systems or programs, including prototypes, based on and related to user or system design specifications;

    (3)  The design, documentation, testing, creation or modification of computer programs related to machine operating systems; or

    (4) A combination of the above duties, the performance of which requires the same level of skills.

Notably, the computer employee exemption does not include employees engaged in the manufacture or repair of computer hardware and related equipment. Nor does it apply to employees whose work is highly dependent on computer software (like engineers or computer-aided designers), but whose primary duties do not fall within the above categories.

Misclassification Mistakes

  • Your employer classifies you as an exempt executive, even though you do not regularly direct the work of two or more full time employees or their equivalent (i.e. four half-time employees);

  • Your employer classifies you as an exempt administrative employee, even though your primary duty is clerical work that does not include the exercise of discretion and independent judgment with respect to significant aspects of your employer’s business;

  • Your employer classifies you as an exempt learned professional because you have an advanced degree or certification, even though your primary duty does not require advanced knowledge or the consistent exercise of discretion and judgment;

  • Your employer classifies you as an exempt creative professional, even though you are not paid on a salary basis, or your primary duty does not involve originality or talent in a creative endeavor;

  • Your employer classifies you as an exempt salesperson, even though your primary duty is making sales from inside an office.

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Attorney Tim Coffield can help you determine whether you are properly classified as exempt and whether you have a possible legal claim for additional pay.

info@coffieldlaw.com