Perhaps the better question is: Have you been misclassified by your South Carolina employer as exempt from being paid overtime? Unpaid overtime is an increasingly common complaint in South Carolina and across the county.

1216_cash-dollars_650x455I’ve written previously about some initial questions that a South Carolina employee needs to ask an experienced South Carolina unpaid overtime lawyer in order to determine whether the employee is entitled to overtime pay or minimum wages under the Fair Labor Standards Act (FLSA). So for this post, I’d like to dig more deeply into the issue of misclassifying an employee as exempt from (i.e., not entitled to) overtime pay.

I’ve had several of these misclassification cases in the last few months, and they typically involve an employee whom the company either deliberately or negligently classifies as “exempt” from (or not entitled to) being paid overtime or minimum wage, often for many years. The company, remember, is under the obligation to ensure that it makes this classification properly, and if it makes the wrong classification and thereby fails to pay properly owed overtime, then the employee can file a lawsuit for violation of the FLSA’s overtime provisions.

The Salary Test and the Duties Test

So what makes an employee exempt or nonexempt from the FLSA? The answer revolves around two criteria. First, does the employee get paid a salary that is at least $455 per week (called the “salary test”)? And second, do the employee’s job duties fall under the so-called “white collar exemptions” (called the “duties test”)? Only if an employee meets the salary requirement AND the white collar exemption will that employee be properly classified as exempt from overtime pay.

The salary question is fairly straightforward. The issue comes, however, when an employer starts making certain deductions from the employee’s wages if the employee misses a day of work. A salaried employee must still be paid his weekly wages if he or she performs any work in that workweek. If an employer makes it a practice to reduce wages for missed days, then that can potentially destroy the exemption and render the employer liable for unpaid overtime. The U.S. Department of Labor has a nice breakdown of this rule here.

What are the “White Collar” Exemptions?

The issue of the white collar exemptions concerns the specific duties that an employee must perform in order to qualify as an exempt worker. There are multiple exemptions, but the most common are the administrative exemption and the executive exemption. The executive exemption requires an employee to have supervisory or management authority over at least two other employees AND have authority to hire and fire employees. If the employee lacks these duties, then the exemption doesn’t apply.

The administrative exemption requires that the employee be engaged in office or non-manual labor AND the employee’s primary duty must include the exercise of discretion and independent judgment with respect to matters of significance. Again, if the employee’s duties don’t meet these strict requirements, then the employee must be paid overtime.

How Does this Impact You, the Employee?

Why does this even matter? Well, if you’ve been improperly classified as exempt and you work more than 40 hours per week, then you have a legal claim against your employer for the amount of unpaid overtime. This amount can be doubled by the court, so if you are owed $10,000, then the court can make the employer pay you $20,000. The financial impact on an employee can be significant.

More importantly, failure to pay properly owed overtime pay is against the law. If you are concerned that you may be improperly classified as exempt from overtime, give us a call or shoot me an email directly. We can review your situation and provide our opinion as to the viability of your claim.