Tamara L. Harper Labor and Employment Law Blog on Lawyers.com

5 Strategies to Avoid Being Sued by Your Employees - 4th in a 5 Part Series

These five strategies you can implement immediately to limit your risk and exposure to employee lawsuits.  Useful tools are provided to you to use as checklists, tips and worksheets.  This is the fourth part in a five part series.  If you desire the entire series immediately at no cost, please contact Harper & Associates, P.C. directly.

Strategy Number 4 - Correctly Classify Sales People - Exempt vs. Non-Exempt

Under California Labor law, for an employee to be exempt as a manager s/he must:

1.  Have primary duties and responsibilities that involve the management of the enterprise.

2.  Customarily and regularly direct the work of two or more other employees.

3.  Have the authority to hire or fire other employees or make suggestions, which will be given particular weight, about personnel decisions regarding other employees.

4.  Customarily and regularly exercise discretionary power.

5.  Spend more than 50 percent of his or her time engaged in managerial duties that meet the tests in the items above, and

6.  Earn a monthly salary equivalent to at least two times the state minimum wage for full-time employment.  The current minimum salary for someone to be categorized as an exempt employee is $2,430 a month, which is twice the starting minimum wage for full-time employment.

A clear job description should be communicated in writing or contained within your policy manual for each exempt position. 

There is critical and detailed analysis to be made for each exemption claimed, whether it is for a salesperson, administrative position, computer professional, executive/managerial position, or professional.  Tamara Harper, Esq., Harper & Associates, P.C. uses a worksheet for each of the above type classifications in order to determine if the position is truly exempt.  The worksheets are quite detailed.  Each position has separately defined criteria and a different worksheet.  Please contact Tamara Harper, Esq. directly to discuss the availability of these worksheets as they are specific to each particular situation and not for general use.

An employer cannot just call a position exempt or give an employee an exempt “sounding” job title.  In order for the position to be truly exempt, several criteria as set forth by California law must be met.

This area has high potential for employer liability.  Remember, just because every other employer in your industry “does it,” does not mean that they will not be sued or audited, and it is your liability and your assets.  Is it worth it to protect your assets?  Consult your labor /employment counsel before paying an employee as an exempt individual.

Harper & Associates, P.C. helps employers negotiate the maze of employment regulations, giving them peace of mind and limit their liability exposure.  Ms. Harper helps companies to never experience the painful process of employment litigation and shows business entrepreneurs how to protect their assets and preserve their wealth by limiting their liability exposure, registering their intellectual property; and holding property in trust.