The Fair Labor Standards Act (FLSA) requires that "non-exempt" employees be paid time-and-a-half for all hours worked over 40 in a workweek. Two common forms of wage theft turn on misclassification: (1) classifying a non-exempt employee as exempt (no overtime), and (2) classifying an employee as an independent contractor (no overtime, no minimum wage protection, no benefits).
Misclassification claims are among the most frequently won FLSA claims because the classification standards are objective and the employer carries the burden of proving the exemption.
Exempt vs. non-exempt
Most "salary" employees assume they are exempt because they receive a salary. That is wrong. Exempt status requires meeting THREE tests:
- Salary basis: Paid a fixed salary that does not vary with quality or quantity of work.
- Salary level: Earning at least the federal minimum (currently $35,568/year as of late 2024; some states require higher thresholds).
- Duties test: Job duties fall within one of the recognized exemptions (executive, administrative, professional, computer, outside sales, highly compensated).
Each duties test has specific elements. Common misclassifications:
- "Administrative" exemption: Requires the employee to exercise discretion and independent judgment with respect to matters of significance. Routine clerical or processing work — even at a high level — does not qualify.
- "Executive" exemption: Requires regular supervision of two or more full-time employees. A "team lead" who does not actually supervise is not exempt.
- "Professional" exemption: Requires advanced knowledge in a field of science or learning. A bachelor's degree in something is not sufficient; the work itself must require the advanced knowledge.
Employee vs. independent contractor
The IRS and the DOL apply slightly different multi-factor tests. The DOL's 2024 rule looks at six factors, all weighted:
- Opportunity for profit or loss based on managerial skill
- Investments by the worker and the employer
- Permanence of the work relationship
- Nature and degree of control by the employer
- Whether the work performed is integral to the employer's business
- Skill and initiative required
No single factor is decisive; the overall economic reality is the test. Common red flags for misclassification as a contractor:
- The employer controls when, where, and how you work
- You are paid by the hour, not by project
- You work full-time, primarily for one company
- You do not have a business identity (no business card, no separate workspace, no other clients)
- Your work is core to the employer's business, not ancillary
Step-by-step: how to evaluate
1. Track your hours
For at least 4 weeks, log every hour worked — including off-hours emails, weekend work, and unpaid lunch breaks if you actually work through them. If your hours exceed 40 in a week and you do not receive overtime, you may have a claim.
2. Apply the duties test
Pull the FLSA duties tests (DOL Fact Sheet #17A is a good starting point). Compare your actual work to the requirements. Be honest — courts will not credit puffed-up job descriptions.
3. Check state law
Many states have stricter overtime rules:
- California: Overtime after 8 hours/day, double time after 12 hours/day, plus weekly overtime. Independent contractor test (ABC test under AB 5).
- New York: Overtime threshold higher than federal in some industries; "spread of hours" pay for shifts over 10 hours.
- Massachusetts: Higher minimum salary for exempt; stronger independent contractor test (3-prong ABC test).
State rules often pay more than federal minimums.
4. Calculate the potential exposure
Unpaid overtime can be claimed for 2 years (3 years for willful violations) under FLSA. Many states allow longer periods. The damages typically double under FLSA (back wages plus liquidated damages equal to back wages) plus attorney's fees on prevailing claims.
For a $80,000/year non-exempt employee working 50 hours/week, the unpaid overtime over 3 years can exceed $50,000 (before doubling).
5. Consult an employment attorney
Most wage-and-hour attorneys take FLSA cases on contingency. The fee-shifting provisions mean the employer pays attorney's fees on prevailing claims, so consultation is usually free and representation is often at no cost to the employee.
Scripts to use
To request a written job description:
"As part of my own records, could you please provide a current written job description for my role, including the duties, supervision responsibilities, and any specific FLSA classification basis?"
Internal request for classification review:
"I've been reviewing my role compared to FLSA duties tests and I'd like to confirm the basis for my exempt classification. Specifically, could you walk me through which exemption applies and the duties analysis supporting it? I want to make sure we're aligned on the classification."
To request unpaid overtime (after classification is questioned):
"Based on my actual job duties and the FLSA duties tests, I believe my role does not satisfy the criteria for the [exemption claimed]. I am requesting that the company reclassify the role as non-exempt and pay overtime for hours worked in excess of 40 per week, retroactive to [date] as permitted by FLSA. I have documented [hours worked] hours per week on average."
What to document
- Your written job description and any prior versions
- Your actual job duties (a daily/weekly log is ideal)
- Your hours worked (use a timekeeping app or detailed calendar)
- Your salary, including base, bonus, commissions, and any deductions
- Emails confirming after-hours work, weekend work, or unpaid breaks
- Any communications about your classification or job duties
- Comparator information — what others in similar roles are paid and classified as
When to escalate
If you believe you have been misclassified:
- Consult an employment attorney specializing in wage-and-hour cases. Most take FLSA cases on contingency. The DOL Wage and Hour Division also accepts complaints and investigates.
- File an FLSA claim within 2 years (3 years for willful violations). Many state claims have longer periods.
- Class or collective action treatment is common for misclassification — your case may be part of a larger group.
- Anti-retaliation protections under FLSA are strong; retaliation following a wage complaint creates a separate claim.
Most misclassification cases settle once the classification is challenged with specific facts. The employer's exposure (back wages, liquidated damages, attorney's fees, potential class treatment) drives most cases to resolution before litigation.
Educational content only — not legal advice. Employment law varies by jurisdiction and situation. Consult a qualified employment attorney for advice specific to your circumstances.