For the first time, the United States Department of Labor is surveying employers and employees about misclassifications, according to a Proposed Information Collection Request by the Federal Register. Through this effort, the DOL aims to gather more knowledge about business owners' understanding of employment practices and rights. 

Employee misclassifications is one of the most common issues the DOL runs into when investigating employers' time and attendance practices. These occur when companies either intentionally or unintentionally file their workers under exemptions which they don't qualify for. If workers qualify for exemptions, their employers might not need to pay them additional wages for working overtime.

However, the Fair Labor Standards Act (FLSA) includes very strict criteria regarding which employees can be considered exempt, including salary requirements and limitations for what their primary job duties can entail. Unfortunately, many employers mistakenly pay their workers as exempt workers when they are in fact owed premium pay for employee attendance in excess of 40 hours in a single workweek. 

"According to one estimate, if only one percent of all employees were misclassified nationally, the loss in overall unemployment insurance revenue due to underreporting would be nearly $200 million dollars annually," the Federal Register release stated, highlighting findings from a Government Accountability Office Report. 

Employee misclassifications can be avoided when employers adhere to state and federal labor laws and develop transparent policies regarding workers' wages. 

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