Payroll professionals have their hands full when it comes to classification of Exempt and Nonexempt employees. They need to exercise utmost caution in this area
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!