Employers often misclassify employees because they lack a clear understanding of the complex criteria established by state and federal governments (whose requirements often differ) for determining exempt and non-exempt status. Misclassifying an employee as exempt can lead to wage and hour claims resulting in mandatory back pay of unpaid overtime, penalties and fines for missed rest and meal breaks, and potential departmental audits. In addition, the rules concerning deductions from an exempt employee's salary are confusing. The U.S. Department of Labor has a long list of do’s and don’ts. In addition, California employers have to deal with state-specific lists that are often contradictory to federal rules.
Learning Objectives: