Is Having Your Job Misclassified as Exempt a Big Deal?

Your employer might see you as being an exempt employee in California under the Fair Labor Standards Act (FLSA) when you’re actually not. This type of misclassification is a violation of the FLSA, and can lead to a lawsuit. But you might be wondering if taking legal action would be worth it. Would the payoff be worth the effort that goes into hiring an attorney who’s an expert in exempt employment laws?

Yes, it would be worth the effort. As you’ll soon see, companies have settled lawsuits for huge sums of money in recent years. Misclassification of employees is, in fact, a big deal – a really big deal. If you hire the right lawyer who knows how to protect your rights, you could be looking at a substantial amount of compensation.

Why Does Misclassification Occur in the First Place?

A lot of employers purposely do things to make it appear that their employees are exempt from the requirements of the FLSA. The reason is that if you’re exempt, you’re not entitled to the type of protection the FLSA provides for non-exempt employees. That means that, in many cases, your employer doesn’t have to pay you overtime, or doesn’t have to pay you for meal or rest breaks.

Your employer might pay you a salary in order to skirt FLSA requirements, or might give you a “manager” title even though you don’t have the right to hire anyone or fire anyone. If that’s the case, then your employer is violating exempt employment laws.

When an employer is caught violating the FLSA, that can cost them an incredible amount of money. Here are just a few recent examples of companies that paid a steep price for misclassification violations.

  • July 2020 – A trucking company settled a lawsuit involving 312 drivers for $6.5 million. The company committed a misclassification violation under the California Labor Code by classifying the drivers as independent contractors rather than employees. They did so even though the drivers claimed the company completely controlled how they did their jobs. The company did so by setting the drivers’ delivery times, requiring them to adhere to company rules and policies, and more. Depending on how long they’ve worked with the company, each driver was expected to receive anywhere from $20,000 to $46,000 in compensation for business expenses, meal breaks and rest breaks.
  • May 2020 – A California federal district court preliminarily approved a $3.5 million settlement payment to more than 700 delivery drivers and helpers. The plaintiffs claimed the department store chain they worked for failed to pay them for overtime hours. They also claimed the company denied rest and meal breaks. According to the terms of the settlement, the drivers will receive 60 percent of the settlement, while the helpers will split 40 percent.
  • October 2019 – A logistics company agreed to pay $16.5 million to settle a case involving a misclassification dispute. The plaintiffs, who are also delivery drivers, claimed the company labeled them as independent contractors when they were actually employees. According to the plaintiffs, the company determined the locations where the drivers would pick up and drop off items, required them to wear company uniforms, determined the types of vehicles the drivers used, and more. The drivers were expected to receive an average of $14,775 each – with some receiving more than $140,000.

Think You Might Have a Case Involving Exempt Employment Laws in California?

As you can see, you might be able to obtain a great deal of compensation if you feel you’ve been unfairly labeled as an exempt employee in California. Get in touch with an employment lawyer that has experience with employee misclassification.  Many of them offer free consultations where they can help you determine whether or not you have a viable case.

Adam Hansen

Adam is a part time journalist, entrepreneur, investor and father.