HAVE YOU AUDITED WHETHER YOUR EXEMPT EMPLOYEES ARE REALLY EXEMPT?

Both state and federal law require that most employees be paid at least the applicable minimum wage, as well as overtime pay at time and one-half the regular rate of pay for all hours worked over 40 hours in a workweek.  The only time an employee is legally exempt from overtime pay is when the employee fits within a specific exception defined by law.  The most common exemptions from the overtime laws are for “white collar” employees; executives, administrative managers, professionals, certain computer employees, and outside sales personnel. 

Careful consideration should be given to each employee before he or she is granted exempt status.  The risk of misclassifying an employee as exempt can easily and quickly become very expensive.  If the misclassified employee successfully challenges the classification or your organization is audited by a federal or state agency, you will be liable for all overtime wages that should have been paid over the previous two years, together with interest, possible penalties, and attorney fees. 

For additional information on classifying exempt employees, please contact us. You can also get more information on the Oregon Bureau of Labor and Industries website or the U.S. Department of Labor’s website.