The United States Department of Labor recently recovered over $1 million in back wages from First Republic Bank for unpaid overtime. The San Francisco-based financial institution was found in violation of the Fair Labor Standards Act (FLSA) for misclassifying 392 employees under administrative and professional exemptions for which they didn't qualify.

"It is essential that employers take the time to carefully assess the FLSA classification of their workforce," said Hilda Solis, Secretary of Labor. "As this investigation demonstrates, improper classification results in improper wages and causes workers real economic harm."

The FLSA includes exemptions for certain employees who are paid on a salary basis and earn more than $455 per week and perform specific tasks on the job. If workers do not meet the criteria for those exceptions to overtime and minimum wage rules, employers need to guarantee they are compensating employees at least $7.25 for all of their time and attendance and one-and-a-half times their hourly earnings for work past 40 hours in a single workweek.

To avoid employee classification issues, employers can outsource human resources tasks to benefit from professional advice and keep payroll practices in compliance.  

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