Improper exempt worker classification and non-compliance with regulations pertaining to them generate some of the largest back pay awards and fines ever recorded. Penalties and back wages are computed with the same formula for all companies—large or small. Exempt employee classification and compliance infractions can be devastating or ruinous to any employer.
Even though payroll rarely makes the decision on which employee is classified as exempt, it is critical that they understand the regulations regarding how the determination should be made. It is even more critical that the payroll department understand and apply the strict rules for paying employees who are classified as exempt. The department must ensure that all exempt employees are paid on a salary basis and that no exempt employee’s wages are docked improperly. Remember the penalties for errors apply to both the classification of the worker and the actual payment of salaries when it comes to exempt employees. More importantly, the penalties are applied to all workers in the same job classification under the same manager when a mistake is made on paying an exempt employee, not just the one worker who was paid incorrectly.
In this LIVE audio session, Vicki M. Lambert, CPP will discuss the four classifications of exempt employees permitted under the IRS Code including executive, administrative professionals and outside sales. She will also examine the salary level test and the salary basis test. Plus, she will determine what deductions can be properly made from an exempt employee’s salary and which, if made, would violate the salary basis test and result in penalties for the employer.
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Vicki M. Lambert CPP
Vicki M. Lambert, CPP is President and Academic Director of The Payroll Advisor™ a firm specializing in the training of payroll professionals. With over three decades of hands-on experience in all facets of payroll functions as well as over 20 years as a trainer and author, Ms. Lambert is a sought-after ... More info