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Penalty for misclassifying employees

Employers in New York and the rest of the country can be heavily fined if they misclassify an hourly employee as exempt. According to the Fair Labor Standards Act, if an employer is unable to demonstrate that the misclassification was an honest error that was made in good faith, a fine that is equal to two times the amount of two years of back overtime will have to be paid as a penalty.

In order to show that an honest effort was made to properly classify an employee, an employer would have to prove that there was a comprehensive investigation into what is required by the FLSA for each exemption that was claimed. If an employer used the existing job descriptions for a position and ignored the actual tasks of the job, the employer would be fined.

In a 2017 case related to the misclassification of an employee, several lieutenants in the Travis County Sheriff's Office sued their employer for unpaid overtime. The employer had classified them as exempt, making them ineligible for overtime.The plaintiffs demonstrated at trial that the work they actually performed did not adhere to the description of an FLSA exemption. The court agreed and concluded that all were due overtime pay. The court rejected the employer's subsequent argument that it should not pay the double-pay penalty because it had acted in good faith and stated that the handbook for the sheriff's department required exempt employee classifications to be based on their job descriptions.

Employees who are being unlawfully denied overtime pay because they have be purposely or mistakenly misclassified as exempt should speak with an employment law attorney. The attorney may assist clients with filing overtime claims to collect on back pay and may report the employer to the appropriate federal agency.

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The Law Offices of Jeffrey E. Goldman
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