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Overcoming an Exempt Employee Classification When Your Duties Really Indicate Non-Exempt Status

Many employers derive substantial economic benefits from classifying workers as independent contractors. The classification means those are not entitled to receive overtime pay, a minimum wage, or additional benefits (like health insurance) that the employer provides only to employees. Due to these economic realities, many employers will classify workers as independent contractors when the nature of their work actually indicates they are employees. If you believe your employer has wrongfully classified you as an independent contractor, you may be entitled to recover compensation in a Fair Labor Standards Act lawsuit. A knowledgeable Atlanta employee misclassification lawyer can tell you more about your options.

Even if your employer classified you as an employee, you may still have been harmed by misclassification. Employers may misclassify non-exempt employees as exempt, as the latter classification means that those workers are not owed time-and-a-half overtime pay when they work more than 40 hours in a week. The exemption categories are professional, administrative, executive, outside sales, and computer-related.

P.F. and J.S. were a pair of property damage investigators who alleged in an FLSA lawsuit that they were among that latter category — non-exempt employees misclassified as exempt.

The men worked for an Atlanta-based risk management firm and, as their job titles implied, they primarily conducted property damage investigations. The employer, however, placed the administrative exemption on them.

According to the federal regulations the Labor Department created to implement the FLSA, the administrative exemption covers only those workers whose primary duties are “the performance of office or non-manual work directly related to the management or general business operations of the employer or the employer’s customers,” and whose work included “the exercise of discretion and independent judgment with respect to matters of significance.”

The federal regulations laid out the kind of work that was administrative. 29 CFR Section 541.203 says that workers who do “ordinary inspection work” that relies on “well-established techniques and procedures” are not administrative employees. Additionally, “inspectors or investigators of various types… whose work involves… ‘gathering factual information’” and applying “known standards or prescribed procedures” typically are not administrative workers.

The Importance of Policy-Level Decision-Making Authority

Beyond the federal regulations, a guidance document the Labor Department’s Wage and Hour Division issued in 2005 also favored the investigator’s argument. That guidance said that “when a fact-finding investigator works for a company whose business is to provide investigative services, that investigator is likely a production employee and not an administrative one.” The guidance provided the example of background investigators working for a private company that did background checks as its primary business.

The 11th Circuit court concluded that the tasks P.F and J.S. performed resembled the work the hypothetical background investigators did. The completion of their duties “focused on diligent and accurate fact-finding according to guidelines set by their employer.”.Additionally, their work did not touch upon decisions impacting the management of the company’s business. Those “typically involve significant decision-making authority, including authority to make policy-level decisions,” which was not true of these investigators, the court concluded.

As a result, the employer failed to prove the investigators were exempt administrative employees, and the investigators were free to continue pursuing their unpaid overtime case.

The knowledgeable Atlanta unpaid overtime attorneys at the law firm of Parks, Chesin & Walbert have helped countless clients seek recovery from the financial harm that comes from being misclassified as an exempt employee. If that has happened to you, know that the FLSA gives you the right to seek compensation, and our team is here to help. Contact us through this website or at 404-873-8048 to schedule a consultation.

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