QUESTION

Exempt v Non-Exempt

Asked on Aug 21st, 2019 on Labor and Employment - Texas
More details to this question:
I've been an exempt status employee for over 6 years but notice that people coming into the company with less experience than me are being paid the same salary or higher. Also a nonexempt employee had a higher salary than me and I was responsible for training her. Is this legal? Could this constitute as pay inequity discrimination since I'm a African American woman?
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1 ANSWER

Litigation Attorney serving Weatherford, TX
Partner at ROGERS, LLP
2 Awards
Let me clarify the exempt/non-exempt issue before I try to answer your question.  Employers who make more than $500k per year in gross revenue and have involvement in interstate commerce (which almost every employer does) must pay employees at least minumum wage and pay them overtime for hours worked in a single week over 40.  The requirement to pay overtime is subject to some statutory and regulatory exemptions that are too lengthy to explain here in full.  For example, if the employee is a professional (Doctor, lawyer, accountant, engineer and others that require advanced education) or a administrator (someone who has the ability to interpret policy and/or make recommendations about important issues - like the head of HR) or an executive or member of managment and there are others are all exempt from the overtime payment requirement as long as they are paid a consistent salary over about $23,500 per year.  The exemption tests are based on job duties, not titles. A differrent set of laws prohibits discrimination in pay on the basis of race or gender, among other things.  To determine whether there is a violation of those laws, one must ask whether others are being paid more for the same or substantially similar work and whether the reason for that difference is race or gender.  In connection with this inquiry, it doesn't really matter whether those employees are exempt or non exempt.  If their total pay is higher than yours and the reason for that difference is race or gender, then your employer is probably violating the law.   Many employers get the classification issue (exempt v. non-exempt) wrong, either through lack of understanding of the law or just plain cheating the system.  If an employee is mis-classified as exempt and is working more than 40 hours per week, that individual is losing money.  However, the reverse is not necessarily true.  A company can never go wrong paying an employee hourly, even if that person is the presiden of the company.   If you think you are being discrimiated against because of your race or gender, you should contact the EEOC or the Texas Workforce Commission - Civil Rights Division (doesn't matter which but the EEOC is a little scarier for employers).  If you think you have been mis-classified as exempt, when you really should be hourly, you should contact the US Department of Labor, wage & hour division.  Both the EEOC and the DOL have websites that will explain these matters further.  
Answered on Aug 26th, 2019 at 6:41 AM

The forgoing is for general information purposes only and does not constitute legal advice or establish an attorney-client relationship.

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