Employee misclassifications can cause serious problems for employers, according to
The Human Resources Journal. The Fair Labor Standards Act (FLSA) was established by the Department of Labor in 1938 to guarantee employees receive the wages they are owed for their
time attendance. It also gives them the right to sue employers who violate these rights.
The FLSA leaves the definition of employer open-ended, the source explains, which means employees can file suits against any person who imposes control over their work, including supervisors, employers and business owners.
The misclassifications occur when employers consider workers nonexempt to avoid paying them the minimum wage or overtime rates they are owed. If employees do not perform administrative, executive, outside sales, professional or independent work, they are usually owed time-and-a-half their regular pay rate for any hours worked in excess of 40.
In a study last year, the IRS estimated there were 3.4 million instances of misclassification in which employers wrongly considered employees independent contractors. To prevent these types of FLSA violations, employers can write detailed job descriptions, hire or outsource human resources staff and use a payroll processing system that accurately calculates wages.
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