Under the Fair Labor Standards Act (FLSA), overtime is considered any time spent working over eight hours a day or forty hours a week. The FLSA, a federal law, requires employers to pay hourly employees one and one-half times their normal hourly rate for all overtime worked. Although there are a few exceptions, these exceptions only apply to certain employees in certain situations.
Class action claims against Wells Fargo
Wells Fargo has recently been accused of violating FLSA by refusing to pay its mortgage consultants overtime. This was allegedly accomplished by misclassification of these particular employees. According to the allegations, current and former loan officers were required to work substantial overtime. They were misclassified by their employer as exempt. In fact, it was alleged that these employees were required to work such extensive overtime that the total hours they worked, divided by their respective salaries, meant they actually earned less than minimum wage. Though continuing to deny any wrongdoing, Wells Fargo has agreed to settle the case.
Categories of employees under the FLSA
Under the FLSA there are three categories of employees who qualify for the overtime exemption: administrative, executive, and professional. The FLSA has defined the responsibilities of each of these categories of employees, to keep employers from arbitrarily making the classification decision. However, in misclassification cases, employers do not follow the FLSA guidelines and place employees in exempt categories in order to avoid paying overtime.
The required duties of administrative employees
In order to be classified as an administrative employee, that employee must spend the majority of their work time performing office work and providing administrative assistance directly to an executive. An "executive" must be someone who spends more than 50% of their time at work managing other employees.
The required duties of executive employees
In order to be classified as an executive employee, that employee must be authorized to discipline employees, as well as, the ability to play a role in hiring and firing of those employees.
The required duties of professional employees
Under the FLSA, the professional category covers all employees who must have a particular set of skills or level of education in order to perform their jobs. Doctors and lawyers are common examples of employees who generally fit under the professional category.
Which employees are properly classified as exempt?
With only a few exceptions, in order for an employer to be properly classified as "exempt," the following factors must be met:
- The employee is paid at least $23,600 per year ($455 per week)
- The employee is paid on a salary basis
- The employee performs exempt job duties
When an employer misclassifies employees, in order to make them exempt from wage and hour laws, that is a violation of the Fair Labor Standards Act.
If you feel you have been the victim of overtime violations, or if you have any questions regarding your employment rights, please contact the experienced employment attorneys at Wrady & Michel, LLC, either online or by calling us at (205) 265-1880.