Fair Labor Standards Act (FLSA): Very Costly FLSA Misclassifications
The Department of Labor (DOL) has obtained a $1.87 million settlement with temp agency 888 Consulting Group Inc. to recover overtime back pay for 973 employees who had been misclassified as "exempt" from the overtime provisions of the Fair Labor Standards Act (FLSA).
In general, FLSA requires employers to pay non-exempt employees the federal minimum wage and overtime (time-and-a-half) for hours worked in excess of 40 hours per workweek. Executive, administrative, professional, outside sales and other employees who satisfy certain job duty and salary tests are "exempt" from FLSA meaning that employers do not have to pay overtime to such employees.
Apparently classifying employees by job titles instead of properly analyzing actual job duties (as required by FLSA), the temp agency in this case misclassified a broad range of employees as exempt and therefore did not pay the misclassified employees overtime to which they were entitled. Misclassified employees who will recover under this settlement held the following job titles: payroll systems analyst, accountant, project manager, business or project analyst, technical support, field engineer, business analyst, technical writer, financial analyst, network engineer, systems administrator, electrical engineer, technical manager, sales representative, software tester, help desk representative, network administrator, and telecom engineer.
The takeaway for employers is that FLSA misclassifications may be costly. Just because an employee's job title suggests that an administrative, professional or other exemption may apply, employers must line up the employee's actual duties with the specific FLSA duties test to confirm that the employee is, in fact, exempt.
For more information on FLSA classifications or other employment-law matters, contact Lori Searcy at 703-644-4122.
