Yes, even lawyers can misclassify non-exempt employees under the Fair Labor Standards Act.
According to this U.S. Department of Labor press release, a Detroit law firm paid its administrative and support staff workers a salary for all hours worked but failed to pay at least 36 workers the overtime wages they earned. So, that will cost the law firm $112K in overtime back wages.
Although the law firm paid these employees a salary — a good enough salary to potentially qualify for an overtime exemption –, they were not “salary exempt.”
What made these salaried employees OT-eligible?
According to the DOL, they did not meet the duty requirements to defer the employer’s overtime pay obligation to the workers as executive, administrative, or professionally exempt employees under the FLSA.
The closest call would be the professional exemption. If a professional employee does not meet all the following requirements, the employer must pay overtime:
- The employee must be compensated on a salary or fee basis (as defined in the regulations) at a rate not less than $684 per week.
- The employee’s primary duty must be the performance of work requiring advanced knowledge, defined as work that is predominantly intellectual in character and requires the consistent exercise of discretion and judgment.
- The advanced knowledge must be in a field of science or learning and must be customarily acquired by a prolonged course of specialized intellectual instruction.
Most non-attorneys at a law firm won’t satisfy these requirements — including paralegals. There are exceptions for highly-compensated paralegals, paralegals with advanced degrees who use that degree to provide expert advice, and certain executive assistants.
Otherwise, the minimum wage and overtime rules apply to non-exempt staff, whether hourly or salaried.
I remember dropping this bomb when I gave an Employment Law 101 presentation at a large paralegal conference a few years ago.
Oh, the astonishment when I told them that most salaried paralegals who work more than 40 hours per workweek — practically all of them — are entitled to time-and-a-half (and potentially double damages if their law firms misclassified them as exempt). I wish I could have bottled some of those looks from the audience.
Perhaps some of you reading this right now could send me a selfie. And when the shock wears off, consider calling a lawyer — outside your firm.