Position Classification Analysis
Classify Employees Properly
The proper classification of employees as exempt or non-exempt or as independent contractors under the Fair Labor Standards Act (FLSA) is one of the most important and difficult decisions that an employer or compensation professional must make. The financial consequences to a business which has improperly classified its employees may be significant since an employee improperly classified as exempt from overtime may file an action in the federal district court to recover overtime back wages for up to three years, an equal amount in liquidated damages, attorney fees, and court costs.
Strong Partnerships With Workers
Making the correct classification decision becomes even more critical when more than one employee works in the position classified as exempt or as independent contractor since these actions frequently evolve into collective actions that include current and former employees.
A position classification analysis includes
Determining the applicability of major exemptions such as the Executive, Administrative, Professional, Computer and Outside Sales Employees,
Determining, where applicable, whether a worker has been properly classified and an independent contractor,
Analysis of the process in place for assigning job classifications to ensure appropriateness and consistency across the organization,
Review of a random sample of position descriptions for employees classified as exempt to ensure the position descriptions support the classification,
Identification and interview of employees whose exempt or independent contractor status is questionable to determine proper classification,
Detailed interviews of the employees whose duties and responsibilities are questionable to determine:
Exempt/non-exempt status of the employees under the FLSA.
Independent contractor or employee status of the workers.
An FLSA Exemption Analysis Summary will be prepared for each position analyzed, noting deficiencies (if any) in the position description and making recommendations on improvements to support the exempt status of the position