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Misclassification can lead to wage theft and other issues

On Behalf of | Jul 12, 2024 | Wage and Hour

An employee is someone who works for an employer. The employer instructs what the worker does. In turn, the employee is paid for their work and may be eligible for some benefits.

Employers may steal wages and take away rights from their workers by misclassifying them. Here is how that can happen:

Exempt and nonexempt classification 

An employee who is classified as non-exempt may be eligible for overtime pay. In Los Angeles, overtime is calculated as one and one-half an employee’s typical wage for every hour worked over 40 hours in a workweek. 

If an employee is classified as exempt, they may not be eligible for overtime pay. This would mean that an exempt employee would only receive their regular pay if they worked more than 40 hours in a workweek. Furthermore, an exempt employee may not be eligible for minimum wage, which is $17.27 per hour as of 2024

Many employees are considered exempt because they work in upper-level positions with a high salary. However, some employers will classify their employees as exempt to avoid paying overtime hours and minimum wage. 

Contractor classification

A worker could be classified as an independent contractor. This may mean that the worker is self-employed. Independent contractors often have the liberty to decide when and how they work. They may also negotiate pay for their services. Yet, an independent contractor is not guaranteed these liberties. Many contractors work for below minimum wage, do not receive overtime pay and are not eligible for benefits, such as workers’ compensation and life insurance. 

An employer may intentionally classify an employee as an independent contractor to limit their rights. This could prevent an employee from receiving overtime pay, minimum wage and other benefits. 

If you believe that you were wrongly classified, then you may need to learn about your legal options. 

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