“I have over thirty years experience in human resources as a business owner, consultant, and an employee. As an employee, I often worked well beyond the hours for which I was officially paid. In some cases, I worked in a position that was misclassified as “exempt.” Unfortunately, many people in business are classified as exempt from overtime, but should be getting paid for overtime. This is because of employer misinformation, rapidly changing and often conflicting regulations, and an employer-perceived low risk of compliance auditing.
Many employers — who control authority over job classifications — incorrectly assume exempt classification is exclusively a factor of income. Particularly in small firms, the low income threshold for non-exempt employees contributes to misclassification. Recently, one HR head emphatically insisted his salaried employees making at least $60,000 could not receive overtime pay under any circumstance. Even when provided with contrary evidence, his belief was so ingrained that he consulted with his attorney, believing the law would back him up. Our relationship soured over this, unfortunately, and the last I heard all job descriptions and exemption classifications were under review. For me, a professional consultant looking to make changes in these business practices, that’s a win.
Salaried jobs are currently classified as executive, administrative, or professional. Technology, however, has dramatically changed the kind of work we do and created even more confusion. In decades past, job descriptions and definitions explicitly identified the work performed by individuals. Everyone knew who the boss was by the work they did or didn’t do. That hierarchy no longer exists, which in turn makes these old job descriptions obsolete. For example, executives used to have “secretaries” take dictation and type correspondence. What executive today doesn’t send out the majority of their own emails? Most executives spend significantly more time doing administrative work than in years past. Ergo, the actual percentages of work being performed may not match the current, but obsolete descriptions.
Many job descriptions have not been updated to reflect the work that people are actually doing. Because of the changes in technology, there are are a lot of supervisory jobs that should be classified as non-exempt. Some employers mistakenly believe that passing out titles like “manager” or “supervisor” negates having to pay overtime. Regardless of title, it is the actual work product that defines whether an employee is non-exempt. For example, if an employer wanted to give the supervisor title to an employee, that employee’s job description would need to meet the “executive duties” definition: spend the majority of their time managing the organization (or a department) and supervising at least two employees. If the supervisor spends over 70% of their time doing administrative and data entry work, alongside those they supervise, then 70% of their work duties are not executive. They shouldn’t be classified as having an executive job, and they shouldn’t be exempt from overtime pay. Employers who don’t understand this risk a negative outcome if audited. It would be wise for HR professionals — working with employees’ actual work duties — to verify that all are appropriately classified.
Writing a clever job description may seem like the solution, but it is meaningless if the work the employee actually performs doesn’t match. If the state did a payroll audit and saw that the job descriptions didn’t match the work people actually did, the employers would be fined and forced to pay a lot of backwages. My advice for HR professionals is to educate yourself about job classifications and err on the side of the employee until you have a definitive classification from a legal authority. There are no fines or penalties for paying employees overtime to which they are not entitled!
Over my business career I have seen many financial business failures, but most fail in their morale leadership. Merely getting away with something does not equate to success. When a business enhances and strengthens its fair practices, it benefits the business, the workforce, and the community. When people are treated with dignity and recognized for the contribution of their honest work product, good things happen. Legally-earned overtime pay remains a critical element of workers’ rights. Every employee, exempt or non-exempt, has gifts to give through an organization. Certainly this world needs all of them.”
— Elizabeth, Human Resources, Business Owner