Determining exempt versus non-exempt employees is one of the biggest issues facing any company. Employers in Texas who make mistakes in this area can find themselves liable for large payouts. Avoiding misclassification of employees is very important for small businesses. It’s important for employers to understand who is exempt and why.
Understanding what “exempt” means
Many workers are subject to regulations about the hours they work and what they are paid. These are generally known as non-exempt workers. Non-exempt workers are regulated by things like minimum wage laws. They may be eligible for overtime if they work more than 8 hours per day or more than 40 hours per week. The details depend on federal, state and even local laws. If they are misclassified, non-exempt workers can can file overtime compensation claims and other actions.
Exempt workers are not covered by these regulations. There are several exemptions written into employment law explaining who exempt workers are, and why they are not covered by regulations. In general, people who have more expertise and control in how they work are likely to be exempt.
For example, the executive exemption makes managers exempt from overtime and minimum wage laws. In order to qualify, a worker must supervise at least two full-time, or four part-time, workers. The outside sales exemption applies to workers who earn commissions. In order to qualify for this exemption, they generally need to spend most of their time outside the office.
If you think you’ve been misclassified, it’s a good idea to contact an attorney. They may be able to help you understand if you are exempt or not. If you have a good overtime compensation claim, they may be able to help you pursue it.