The $20.9 Million Mistake Your Company Can Do Without

What’s the big deal about proper classification of employees (exempt versus non-exempt, employee versus independent contractor)? As long as your company is paying them, you’re good, right? Does it really matter how they’re classified on paper?

To be blunt – YES … it matters. It matters a lot. Not paying close attention to how you classify your staff under FLSA (Fair Labor Standards Act) regulations can land you in legal hot water if the employee (or even the government) files a claim later for improperly paid wages or compensation. The costs of these claims can be huge in terms of money, time, bad publicity, lost business and more. Earlier this year, Rite Aid paid out $20.9 million in a Class Action Lawsuit brought against them for FLSA wage and hour violations due to misclassification of employees.