Exempt vs. Non-Exempt Misclassification

You work 50 or 60 hours a week. Your employer calls you "salaried" and "exempt." You never see a dime of overtime pay. And you assume that's just how it works — that being on salary means overtime doesn't apply to you.

It doesn't work that way. Many so-called "exempt" employees are actually entitled to overtime, and their employers either know it or have been too careless to figure it out. Under the Fair Labor Standards Act at 29 U.S.C. § 207, non-exempt employees must receive overtime pay at 1.5 times their regular rate for all hours worked over 40 in a workweek. The only way an employer avoids this requirement is if the employee qualifies for a specific exemption — and qualifying is harder than most employers pretend.

The Two-Part Test That Most Employers Get Wrong

To qualify for one of the FLSA's "white collar" exemptions — executive, administrative, professional, computer professional, or outside sales — an employee must pass both a salary threshold test and a duties test. Miss either one, and the employee is non-exempt, meaning they're owed overtime for every hour over 40 they've worked.

The salary threshold is the easier requirement. Under current federal rules, an employee must earn at least $684 per week ($35,568 annually) on a salary basis to potentially qualify for a white collar exemption. But that threshold is just the first step. Paying someone $50,000 a year does not automatically make them exempt — it just clears the salary hurdle. The employee must still meet the duties test for one of the specific exemption categories, and this is where the real analysis happens.

Oklahoma follows the federal salary threshold, though other states have set higher floors. Employers need to stay current because this number can change, and what was compliant last year may not be compliant next year.

The Duties Tests: What Actually Makes Someone Exempt

The executive exemption requires that the employee's primary duty is managing the enterprise or a recognized department, that they regularly direct the work of at least two full-time employees, and that they have genuine authority to hire and fire — or at least significant influence over those decisions. The classic example is a store manager who directs a team and makes staffing decisions. But the key phrase is "primary duty." If the so-called manager spends 80% of their time doing the same work as hourly employees — stocking shelves, running the register, serving customers — management isn't actually their primary duty, regardless of what the org chart says.

The administrative exemption requires that the employee's primary duty involves office or non-manual work related to management or business operations, and that they exercise discretion and independent judgment on significant matters. This exemption trips up more employers than any other. It isn't enough to do important work — the employee must have genuine authority to make decisions that affect business operations. Following established procedures, implementing others' decisions, and performing skilled but routine work doesn't qualify, no matter how critical the employee's role feels.

The professional exemption comes in two varieties. The "learned professional" exemption requires that the primary duty demands advanced knowledge in a field of science or learning, typically acquired through specialized education — think doctors, lawyers, engineers, and accountants. The "creative professional" exemption requires invention, imagination, or talent in a recognized creative field. Both have narrow applications and are frequently misapplied to employees whose work, while skilled, doesn't meet the legal standard.

The computer professional exemption requires that the employee's primary duty involves systems analysis, programming, software engineering, or similar highly skilled computer work. Help desk technicians, network administrators who handle routine maintenance, and basic IT support staff almost never qualify — even though employers frequently classify them as exempt simply because they work with computers.

The outside sales exemption requires that the employee's primary duty is making sales or obtaining contracts and that they regularly work away from the employer's place of business. Inside sales representatives who work from an office or call center don't qualify regardless of their commission structure.

The "Primary Duty" Problem

The most common misclassification error involves the primary duty requirement, and it's where employers most frequently cheat. An employee's primary duty is defined as the main, major, or most important duty they perform. Employers give someone a "manager" title, pay them a salary, call them exempt — and then have them spend the vast majority of their time doing the exact same work as every hourly employee in the building.

This is the assistant manager problem, and it's rampant in retail, food service, and hospitality. A fast food restaurant calls all shift leaders "assistant managers" and pays them salary. But these employees spend their days cooking, cleaning, and serving customers. They don't supervise two full-time employees, they don't have hiring or firing authority, and their "management" duties are incidental at best. Under any honest analysis, they're non-exempt — and their employer owes them years of unpaid overtime.

The same pattern repeats in offices. A small company titles someone "Office Manager" and pays them salary, but their actual duties are answering phones, scheduling appointments, and filing documents. Without genuine discretionary authority over business operations, they're non-exempt. A construction company pays foremen on salary and calls them exempt, but they spend most of their time working alongside the crew rather than managing operations. In every case, the analysis is the same: what does the employee actually do most of the time, not what does their business card say?

Why Employers Misclassify — And What It Costs You

The financial incentive for misclassification is enormous. If you work 50 hours a week at a $50,000 salary, proper overtime calculation would require significant additional compensation. By misclassifying you as exempt, the employer captures that overtime for free. Some employers misclassify intentionally, understanding the rules and choosing to violate them because they calculate that most employees won't challenge the classification. Others genuinely misunderstand the legal tests and rely on assumptions — "she's salaried, so she must be exempt" — that have no basis in law.

Either way, the result is the same: you work overtime, and you don't get paid for it. And under the FLSA, you can get that money back. Misclassified employees can recover all unpaid overtime wages for every hour over 40 they worked, liquidated damages equal to the unpaid overtime amount — effectively doubling the recovery — and attorney fees and costs. The statute of limitations is two years for standard violations, or three years if the violation was willful. When the same misclassification affects multiple employees, a FLSA collective action may allow workers to combine their claims for greater impact and shared litigation costs.

How to Evaluate Your Own Status

The analysis starts with a simple question: do you earn at least $684 per week? If not, you're almost certainly non-exempt regardless of your duties. If you clear the salary threshold, the next question is what you actually do most of the time. If you spend the majority of your hours doing the same work as hourly employees, you're likely non-exempt regardless of your title.

For the executive exemption specifically, ask whether you genuinely supervise at least two full-time employees and whether you have real authority over hiring and firing. For the administrative exemption, ask whether you exercise genuine discretion on significant business matters or merely follow established procedures. For the professional exemption, ask whether your job truly requires advanced professional education or creative work at a level the law recognizes. If the honest answers don't line up with the exemption your employer has assigned you, there's a real chance you've been misclassified — and you may be owed substantial back pay.

Employers who misclassify workers to avoid overtime are counting on you not knowing the law — or not thinking the fight is worth it. At Addison Law, we represent Oklahoma workers in overtime and wage claims. Our attorneys evaluate exemption status, calculate back wages, and pursue full recovery including liquidated damages. If you've been denied overtime you earned, contact us.

Frequently Asked Questions

I'm paid salary. Doesn't that mean I'm exempt?

No. Salary is only one requirement. You must also meet the duties test for a specific exemption. Many salaried employees are fully entitled to overtime, and being paid on a salary basis doesn't change that. The duties you actually perform — not the way you're paid — determine whether you're exempt.

My employer says my job title makes me exempt. Is that right?

No. Titles don't determine exemption status under the FLSA. The actual duties you perform — how you spend your working time — control whether you meet the requirements for an exemption. An employer can call you whatever they want; it doesn't change the legal analysis.

Can my employer dock my pay if I miss a few hours?

If you're truly exempt and paid on a salary basis, your pay generally cannot be docked for partial-day absences. Docking pay for exempt employees improperly can actually destroy the exemption entirely, converting every affected employee to non-exempt status and triggering overtime obligations retroactively.

What if I signed an agreement saying I'm exempt?

Agreements cannot override the FLSA. If you don't actually meet exemption requirements, you're entitled to overtime regardless of what you signed. Employers cannot contract around federal wage-and-hour law, and any agreement purporting to waive overtime rights is unenforceable.

How do I calculate unpaid overtime if I was misclassified?

Calculating back overtime for salaried employees involves specific rules for determining your "regular rate" and applying the 1.5x multiplier to all hours over 40 in each workweek. The calculation varies depending on whether you were paid a fixed salary for a fixed schedule or a fluctuating workweek. An attorney can determine the correct methodology and calculate your total recovery.

This article is for general information only and is not legal advice.