This is one area that payroll professionals dread: classifying employees as exempt and nonexempt. On the surface, it looks fairly simple, but dig a little, and even experienced professionals get the jitters.
This is primarily because classifying employee into exempt and nonexempt categories wrongly and its concomitant compliance infringement lead to the following situations:
- In the case of exempt employees, penalties for errors apply to both the classification of the worker and the actual payment of salaries;
- In a worst case of punishment, it is not just making one wrong classification that is considered a mistake; all workers in the same job classification under the same manager are penalized!
The way ahead is to understand the following:
To get a complete understanding of these confusions regarding payment of exempt employees, an interactive session (link) would be highly useful.