Administrative Exemption

Did you know that employers very often deny employees overtime pay, by claiming that the employees are administrative workers? Both federal and state law require employers to pay “non-exempt” employees a minimum wage and overtime pay. But federal and state law do not protect every employee; some employees are explicitly exempt. So-called exempt employees are not entitled to overtime pay. There are several categories of exempt employees, but employers most often use what’s known as the “administrative exemption” to withhold overtime pay from employees. It is not at all uncommon for an employer to claim that an employee is an administrative professional and then deny the employee overtime pay.

What is the Administrative Exemption?

The Fair Labor Standards Act (“FLSA”) is the federal law that governs the minimum wage and overtime pay. It is important to note that an exemption is not based on the employee’s job title. An employer cannot exempt an employee just by calling that employee an administrative professional. Instead, the exemption is based on the employee’s substantive responsibilities and pay. In order to fall under the administrative exemption, an employee must meet each of the following requirements:

• The employee must earn a salary or fee of at least $455 per week;
• The employee’s primary job duties must include office or non-manual work directly related to the management or business operations of the employer or the employer’s customers, such as accounting, human resources, compliance, marketing, database administration, and other similar activities; and,
• The employee’s primary job duties require the exercise of discretion and independent judgment on significant matters.

Only employees who meet every one of these categories will qualify as an exempt administrative professional.

The California Labor Code’s definition of an administrative professional is similar to FLSA’s, albeit with some differences.

Employees Often use the Administrative Exemption to Deny Overtime Pay

The administrative exemption is by far the most frequently disputed for a variety of reasons. Sometimes employers improperly mark an employee as exempt in a misguided attempt to honor the employee, on the basis that it is more prestigious to be exempt than non-exempt. Other times, employers simply misunderstand the classification and improperly categorize an employee as an exempt administrative due to mistake. Regardless of the reason for the misclassification, employees, who are improperly categorized as exempt administrative professionals, suffer real costs. Such misclassified employees can forfeit thousands of dollars of overtime pay.

Penalties

Employees who have been misclassified as administrative workers are not without redress. Under Federal and state law, employees are entitled to recover back pay unpaid overtime, sometimes at a double rate, as well as the costs of litigation from their employer.

A Misclassification Lawyer can Help

It is, unfortunately, very common for an employer to misclassify an employee as an exempt administrative professional. If you suspect that your employer has misclassified you as exempt and denied you overtime pay, you do not have to forfeit your rights. The misclassification lawyers at Nassiri Law Group, practicing in Orange County, Riverside, and Los Angeles can help you recover the overtime pay you deserve. Call today at (949) 375-4734 for a free case evaluation.