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Exempt vs. Non-Exempt: Avoiding Wage Violations

Apr 13, 2015 | Written by: Leslie A. Parikh, Esq. |

Most employees are classified as either “exempt” or “non-exempt” for purposes of New Jersey and Federal wage laws.  Salary and type of work are significant factors in evaluating the exempt or non-exempt status of an employee.  If an employee is non-exempt, the federal Fair Labor Standards Act (FLSA) requires that, in addition to paying at least the minimum wage, employers also must pay overtime to employees who work more than 40 hours in a given work week, unless they meet certain exceptions. Like Federal law, New Jersey labor law counts as overtime any hours worked beyond 40 in a given week, and requires that overtime hours be paid at a rate of one and one-half the employee's regular hourly wage.

An exempt employee is an employee who is exempt from the overtime provisions of the Wage and Hour Laws. Improperly classifying non-exempt employees as exempt can result in significant penalties and legal consequences. Employers can be held liable for back overtime wages plus interest to employees who are improperly classified. The employee may be eligible for two years of back overtime wages, or three years if the misclassification is determined to be intentional, plus liquidated damages and attorney’s fees and costs. The employer may also incur fines/fees levied by the Department of Labor. Therefore, ensuring that your employees are properly classified is imperative. The attorneys at Gebhardt & Kiefer can provide you with the legal expertise you need in order to protect your business.

For suggestions and recommendations, contact Leslie A. Parikh, Esq. at Gebhardt & Kiefer, PC.