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The Consequences of Misclassification

The Consequences of MisclassificationMisclassifying employees a common, yet detrimental mistake. Accidentally misclassifying an employee as exempt can be costly to your business. In addition to ensuring that your employees are correctly classified, it’s important to stay protected with New Jersey Small Business Workers’ Comp.

According to an article in Monster, there are certain exempt and nonexempt standards to be aware of.

You are considered exempt from overtime if:

  1. Your salary is at least $455 per week or $23,660 per year. This can change in different states.
  2. Your primary duty is managing the enterprise.
  3. You regularly direct the work of two or more other employees.
  4. You have the authority to hire or fire.

You are considered a nonexempt exception if:

  1. Administrative: These are typically jobs that include office manager, insurance agent, HR professional, and marketing personnel.
  2. Professional: These are typically jobs that include doctor, lawyer, dentist, professor and accountant.
  3. Outside Sales: These are jobs that require you to make sales away from your employer’s office. No salary qualification.

Let’s say you’ve classified an employee as exempt when they’re really nonexempt. They can sue and collect unpaid overtime.

Make sure to straighten this out before your business ends up in court. Do not fire any employees for pointing out this error because it’s illegal. Protect your employees by providing them what they deserve.

At Associated Specialty Insurance Agency, we deliver creative Workers’ Comp solutions for your small business. We can help you provide your small business clients with affordable solutions that meet their needs. Workplace safety, loss control expertise and timely and responsive claims handling and settlement is also part of our Workers’ Comp programs. For more information, call us today at 866.679.7457.

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