Exempt Employee Misclassification

This page concerns exempt employee misclassification under New York and federal law. If you are looking for information about independent contractor misclassification go here.

Employers often cheat their workers out of overtime by claiming that their workers are exempt, when they are not. Our New York attorneys are familiar with the many federal and state law exemptions and their requirements. In many cases, we can determine whether a worker has been misclassified.

What is an Exempt Employee?

Under federal and New York State law, exempt employees are excluded from minimum wage and overtime protection. Hover, non-exempt employees have a right to minimum wage for all hours worked and overtime when working more than forty hours in a week.

Exempt employee misclassification is illegal under federal law and the laws of many states. To qualify for an exemption, the employer, not the employee, must prove that a worker fits into one of the specific legal exemptions. Each exemption has very specific requirements that must be met in order for an employee to be considered exempt.

Federal law provides some protection for workers’ rights to minimum wage and overtime. However, state exemption laws often provide stronger protections. These include higher salary requirements, longer statutes of limitations, harsher penalties, or more stringent exemption requirements. An employer subject to federal law must satisfy the exemption requirements for both federal and state law.  

What Are Some of the Exemptions?

There are several dozen exemptions under the FLSA and the NYLL. The most common three are known as the “white collar” exemptions: the executive, administrative, and professional exemptions. Under the NYLL, those exclusions have the following requirements. 

Executive Employees:

1. must be paid a salary;
2. must meet a minimum salary;
3. must manage the business or a recognized department of the business;
4. regularly direct the work of at least two full-time employees or their part-time equivalent; and
5. must have authority to hire and fire employees or their recommendations regarding changes to other workers’ employment status must carry particular weight.

Exempt executive employees may include high level managers, and corporate executives.

Administrative Employees:

1. must be paid a salary;
2. must meet a minimum salary requirement;
3. their primary duty must be the performance of office or non-manual work directly related to the management or general operations of the business of the employer or their customers; and
4. their primary duty must include the exercise of discretion and independent judgment on significant matters.  

Exempt administrative employees may include human resources personnel, payroll and benefit managers, and public relations workers.

Exempt Executive and Administrative employees working in New York City, Westchester, and Long Island must be paid a salary of at least $1,125 per week ($58,500 per year). The salary threshold for Executive and Administrative Employees in upstate New York is $1,0624.25 for 2023.   

Professional Employees:

1. the employee’s primary duty must be the performance of work requiring advanced intellectual knowledge that requires the regular exercise of discretion and judgment; and
2. their advanced knowledge must be in a field of science or learning and must customarily be gained by a prolonged course of specialized instruction.

Exempt professionals include accountants, doctors, teachers, and attorneys. There is no salary requirement for professional employees in New York. However, federal law requires a minimum salary of $684 per week for most exempt professionals as of 2023.  

Employers Use Different Methods of Tricking Workers Into Believing They Are Exempt From Overtime Protection When They Are Not.

Here are some things you should know about exempt employees:

Employees are not exempt just because they receive a salary. 

While many exemptions have minimum salary requirements, the employee’s actual job duties must satisfy the strict statutory requirements that the employer claims is applicable.

Even if you are paid a salary, you may still be entitled to overtime. Many restaurant workers including waiters, bussers, cooks, and dishwashers are paid on a salary basis, but the still have a right to overtime pay when working more than forty hours in a workweek. 

Employees are not exempt just because they have a fancy job title or job description.

Employers cannot get away with creating a job title that sounds like it fits into one of the exemptions when it does not. In addition, the employee’s job description is meaningless if it does not reflect the actual responsibilities of the job. “Assistant Managers” without actual authority satisfying the strict legal requirements of an exempt executive will still be entitled to overtime.

If you think you are the victim of an exempt employee misclassification scheme, contact our New York wage theft attorneys. Consultations are always free.