Worker Misclassification: Challenges of Determining Exempt vs. Non-Exempt Employees

Outline

1. Current legal trends, including the status of the "salary basis" rule and salary level under the FLSA and state laws
2. Positions most vulnerable for FLSA and state claims: how to determine the correct classification
   1. Clerical and administrative support personnel
   2. Assistant managers, supervisors, and team leaders without sufficient staff
   3. IT workers
   4. Sales staff
3. Self-audit strategies
   1. Who should conduct an audit?
   2. Review pay practices and policies: overtime, bonuses, etc.
   3. Review job descriptions versus what employees actually do
   4. Review new positions added after a merger or acquisition
   5. Documenting the audit
4. Correcting errors and limiting liability exposure
5. Establish compliance program
6. Reclassify positions to protect exemptions
7. Consider voluntarily paying back wages
8. Whether to notify the DOL of the error
9. Prepare for state or federal regulatory inquiry into classification practices

Benefits

The panel will review these and other key issues:

• Which positions are most often misclassified as exempt--and how can employers and their counsel best determine the appropriate classification for such positions?
• What self-audit approaches are effective to identify and correct errors with a focus on compliance with the duties and salary basis tests--and protect the company from future liability?
• What are the legal risks of voluntarily paying back wages to misclassified employees? If such payments are made, how far should an employer go back and should liquidated damages be included?
• Should employers take the initiative to notify the Department of Labor of classification errors discovered during self-audits? As private FLSA releases are generally not enforceable, what other measures can an employer take to minimize exposure against exemption claims?