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[show]- How does FLSA misclassification hurt you?
- How to recognize misclassification
- What employees are exempt from overtime pay?
- Executive Exemption
- Administrative Exemption
- Professional Exemption
- Computer Employee Exemption
- Outside Sales Exemption
- Independent Contractors
- What are the signs that an employee is misclassified as exempt?
- How to report FLSA misclassification
- What can you recover from misclassification cases?
FLSA Misclassification
Have you been told that you aren’t eligible for overtime or other employee benefits because of the way that your position is classified?
While some employees are exempt from these benefits, many are improperly classified and unjustly deprived of their entitled pay.
A lawyer may be able to help you reclaim the earnings that you have lost, and restore your proper classification, seek back-pay owed, and ensure you earn entitled overtime.
Before you contact a lawyer, it may help you to understand what it means to be misclassified to help determine if you really do have a claim.
This short guide will help you understand how misclassification affects you, how to recognize misclassification, how to respond, and what you may be able to recover.
What is FLSA Misclassification?
Under the Fair Labor Standards Act (FLSA) employees are either classified as exempt or non-exempt. Employee FLSA misclassification is when employers deliberately classify workers as exempt in order to avoid paying federal law required overtime time-and-a-half pay. Federal law requires that most employees (non-exempt) who work more than 40 hours a week receive overtime pay.
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How does FLSA (Fair Labor Standards Act) Misclassification Hurt you?
FLSA misclassification hurts you by depriving you of protections that non-exempt employees are entitled to receive.
One of those protections is the eligibility for overtime pay.
Employees covered by the FSLA must receive overtime pay for any hours they have worked past 40 in a single workweek.
The law sets the overtime rate at not less than time and one-half of your regular pay rate.
When you are misclassified, you are deprived of up to ⅓ of the pay that you should receive whenever you work overtime hours.
Over months and years, this could end with you losing tens of thousands of dollars in compensation.
Exempt vs. Non-Exempt: How to Recognize Misclassification
It can be difficult to determine whether or not you are misclassified. It can help to understand what employees truly are exempt from overtime pay, and what the signs are that an employee isn’t properly classified.
What employees are exempt from overtime pay?
Certain employees are not eligible to receive overtime pay. Exemptions exist for all of the following job roles.
- Executive Exemption: Employees who serve as executives are exempt from overtime pay. To be classified as an executive, your primary job must be to manage the company or one of its departments. You must also manage not less than two full-time workers, and exercise influence over staffing decisions.
- Administrative Exemption: Employees who serve as administrators are exempt from overtime pay. To be classified as an administrator, you must exercise discretion and independent judgment over day-to-day operations. Administrative assistants, such as secretaries, are not considered to be exempt.
- Professional Exemption: Professional employees are exempt from overtime pay. Employees classified this way must be engaged in work that requires advanced knowledge, and involve discretion. Doctors and engineers are examples of professional positions.
- Computer Employee Exemption: Computer employees are exempt from overtime pay in some circumstances. The exemption only applies to employees who perform advanced duties, such as analysts and software engineers. The exemption doesn’t apply to non-professional employees such as computer repair techs.
- Outside Sales Exemption: Employees who focus on making sales or getting contracts may be exempt from overtime pay. This exemption only applies to salespeople who spend most of their time away from the place of business. Salespeople who work out of a corporate office most of the time may be eligible for overtime pay.
- Independent contractors: Independent contractors are not traditional employees, and they are not eligible for overtime. However, a significant number of employees are improperly classified as independent contractors.
What are the signs that you are misclassified as exempt?

It can be difficult to determine whether you are misclassified or not. It may come down to very specific legal definitions. Until you’ve spoken to a lawyer who can tell you more, the following signs may suggest that you are currently misclassified.
- Your duties are not consistent with other people who share your role
- Other people in your role are eligible for overtime
- You have been asked to misreport your duties or job title on forms
"Victims of employee misclassification are wrongfully denied overtime wages required to be paid by Federal law..."
What are the signs that you are misclassified as exempt?
It can be difficult to determine whether you are misclassified or not. It may come down to very specific legal definitions. Until you’ve spoken to a lawyer who can tell you more, the following signs may suggest that you are currently misclassified.
- Your duties are not consistent with other people who share your role
- Other people in your role are eligible for overtime
- You have been asked to misreport your duties or job title on forms
How to report FLSA misclassification
You should take careful steps when you believe that you have been improperly classified. You can start by speaking to a lawyer. A lawyer can offer you more insight into the next steps, or give you a more educated answer on whether you are truly misclassified.
You may talk to your employer to find out if your classification can be reviewed. If your employer refuses to update your classification, you should be provided with an explanation. Make sure you keep copies of this explanation, as it may be used as evidence.
Many state labor departments manage anonymous tip lines where employees can report personal or shop-wide misclassification. Reporting your employer in this way is an option, but it may take a while to see results.
You can file federal reports through the U.S. Department of Labor's Wage and Hour Division (WHD). [5] This agency is responsible for enforcing the proper classification of workers.
While all of these reporting options may result in your classification, they may not result in the recovery of your lost overtime pay.
What can you recover from misclassification cases?
If you proceed with a civil case, you are entitled to claim up to two years’ worth of unpaid back pay as long as you file within the right amount of time. If you can prove that the violation was willful, then you may be able to claim up to 3 years of unpaid overtime.
Misclassifying employees may have additional consequences for employers. Each violation can come with penalty fines of up to $1000. The employer may also be exposed to IRS action, and collective civil suits from groups of misclassified employees denied overtime.
Is it Time to Speak to a FLSA Lawyer?
If you have been improperly denied overtime, you may have lost thousands of dollars in wages already.
You should speak to an overtime lawyer to determine what timeline you have to claim compensation, and how much you may be entitled to recover.
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