Pay Back OT if Non-Exempts misclassifed years ago as Exempt?

HRBob

Is an employer obligated to pay back OT if they discover several exempt employees are actually non-exempt? If, yes, how far back does an employer go? Why? Or if back OT does not need to be paid, what liability may exist for the past misded classification? Thanks

Theresa Gegen TX

The Company may have to pay back overtime to employees. The Fair Labor Standards Act provides for a 2 year limitation, and 3 years if the violation was knowingly.

An employee could file a claim with the Department of Labor, a similar state agency, or file suit for wages due.

I suggest that if your company believes the employees were misclassed, that it hires a qualified attorney to help advise it. Classification is tricky, and it may be that the employees were not actually misclassed. If they were misclassed as exempt when they were in actually non-exempt, reclassification can cause serious problems (many employees are pround of their exempt status, because they equate it with a supervisory status or a special status -- that can trigger the employee to look closely and then file a claim).

Good Luck!

HRBob

Thank you for your ideas and feedback.

Rockie

You are correct. A lot of employees "ask" if they can be exempt and don't understand it is not a choice matter. Some think it is an "honor" to be exempt and would be truly shocked to find they may come out better monetarily if they are paid for the extra hours they put in as overtime.

If an employee is truly misclassified, the company must do their best to make them whole, which means going back at least two years. As stated before, I agree you should get a legal reading (and a letter to back it up) about the classification of an employee before you make a rush to judgment. You can trigger others to look at their status if they feel they might be able to get a nice lump sum for their trouble The DOL is friendlier towards employers who truly are trying to do the right thing and are willing to correct honest mistakes. Where you get in trouble is if the DOL thinks a company is trying to "weasle" out of paying overtime by making someone exempt.

Margaret Morford

Also as you're looking back, remember jobs change over time as well as how the DOL classifies them. Before you decide you owe OT two years back, remember the job responsibilities may have changed recently to make the job non-exempt rather than exempt or the DOL and/or case law may have changed to take it non-exempt.

Margaret Morford
theHRedge
615-371-8200
[email]mmorford@mleesmith.com[/email]
[url]http://www.thehredge.net[/url]

trc454

I got nailed in a DOL audit $ went back for the calendar year

HRBob

Thanks for the feedback.