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Why it’s important to correctly classify an employee

Jan 25, 2024 | Employment litigation

Employees are classified based on their job duties, expectations and responsibilities. For instance, part-time and full-time are some of the most common employee classifications. A part-time employee is someone who often has flexible work hours but is expected to work less than a full-time employee. A full-time employee is expected to work 40 hours a week and often gain benefits, such as health insurance and paid time off. 

It’s also crucial to classify employees to maintain compliance with labor laws. When an employee is misclassified, then they may claim it was done as an act of wage theft or to violate their rights. Here are a few typical misclassifications that can lead to legal battles: 

Exempt and non-exempt

A non-exempt employee has the right to overtime pay. In California, overtime pay is entitled when an employee works more than 8 hours in a single work day. Likewise, an employee who works more than 40 hours in a single work week is entitled to overtime pay. For working more than 8 hours in a day or 40 hours in a week, an employee is given one and one-half of their typical pay. Overtime pay is doubled if an employee works above 12 hours in a single work day. 

An exempt employee doesn’t have overtime pay benefits. Many exempt employees are salaried and hold administrative or executive positions because of it. Misclassifying an employee as exempt and having them work extra hours without pay could be a form of wage theft if, in fact, the employee category still entitles them to overtime pay. 

If an employee is claiming they were entitled to overtime pay, then employers may need to learn about their legal defense options.