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In Connecticut, failing to properly distinguish between exempt and non-exempt employees can lead to serious wage and hour disputes, government audits, and liability for unpaid wages and penalties. Understanding the difference is essential for compliance and protecting your business. In this post, our Stratford wage and hour attorneys discuss how to correctly classify employees under Connecticut and federal law, so you can avoid common (and expensive) mistakes.
What Is an Exempt Employee in Connecticut?
Exempt vs. non-exempt employees refers to which employees are entitled to receive overtime pay. A non-exempt employee must be paid overtime wages for all time worked more than 40 hours per workweek in accordance with federal and state wage and hour laws.
Misclassification occurs when an employer classifies an employee as an independent contractor or an exempt employee. Generally, employers must consider two critical elements when determining whether an employee is exempt or non-exempt.
Tests to Determine if an Employee Is Exempt or Non-exempt in Connecticut
The two factors that define whether an employee is exempt vs. non-exempt are the duties test and the salary test.
The Duties Test
The duties test examines the various tasks the employee is required to perform. It goes far beyond an employee’s job title. Generally, an employee must use judgment and discretion on a regular basis to be considered an exempt employee.
The exempt categories for overtime pay in Connecticut are:
- Executive and administrative employees
- Professionals such as doctors, lawyers, and teachers
- Agricultural employees
- Outside salespersons are defined by the Fair Labor Standards Act
- Helpers or drivers where the minimum work hours or qualifications for the job are set by the U.S. Secretary of Transportation
- Salespeople who primarily engage in automobile sales
Determining whether an employee is exempt or non-exempt should be done on a case-by-case basis. For example, two employees with the same job may have different classifications based on whether they are required to exercise judgment and discretion or do what they are directed to do by managers.
The Salary Test
An employee on salary receives a predetermined amount of wages each pay period. The amount they receive is not based on the number of days or hours the employee works. However, placing employees on salary does not automatically make them exempt.
The employee must meet the duties portion of the two-part test to be exempt. If the duties portion of the test is not met, the employee is non-exempt for overtime pay even if they meet the salary test.
In addition to the duties and salary test, some exemptions require that an employee be paid at least a specific amount to be exempt. For example, for the administrative exemption to apply, the employee must receive a base salary of $475 per week.
Schedule a Consultation With Our Stratford Employment Attorneys
Employee classification can be challenging. An employee may be exempt under federal laws but non-exempt under state law. One of the best ways to avoid legal problems is for employers to understand their obligations regarding pay and overtime. Addressing a misclassification dispute can be challenging.
Our Stratford employment law attorneys at Mitchell, Sheahan & Slippen, P.C. can help. Call our office to schedule a consultation with an attorney.