Last December I wrote about how an employee wage misclassification case cost Oracle $35 million. The question about whether an employee is exempt v. non-exempt is often misunderstood by employers. Often, employers want to avoid paying overtime to employees. So employers will play a game of Russian roulette by paying those workers a salary instead of hourly.
Have you reviewed your employee wage classifications recently? If not, we recommend that you do so. We have found in our reviews that employers large and small often make mistakes in classifying the wages of their workers. Sometimes even companies with sophisticated HR departments make errors – just ask Oracle. And companies right here in Iowa make mistakes too.
A tremendous resource regarding employee wage classification found on the Department of Labor website at www.dol.gov. There’s great information on the site about the tests used to determine whether employees are exempt or non-exempt . Don’t wait for a lawsuit to review your wage practices. By then, the horse will be out of the barn and you’ll likely find yourself paying a substantial settlement or judgment.