Arizona employers who misclassify their employees as exempt or as independent contractors may be required to pay damages and penalties to those employees.
State and federal laws allow Arizona employees to recover unpaid wages and/or penalties when such employees are not paid all wages they are entitled to be paid during the term of their employment. Two common mechanisms employers use to deny compensation to employees, sometimes without the intent to do so, are misclassifying an employee as an “exempt” employee and misclassifying an employee as an independent contractor.
Regardless of whether such a misclassification is the result of the ignorance of the employer; an accidental oversight, or a deliberate act to limit an employee’s pay, employees can generally recover such unpaid wages provided they bring their claims within the various applicable statutes of limitation. Because the state and federal laws governing the classifications and damages are complex, an Arizona employment law attorney should be consulted to give you a better understanding of whether Arizona state or federal employment laws have been violated as a result of your classification as exempt or non-exempt.
Employees should understand that just because a job has a title of “supervisor,” or “manager,” or because you have been informed that the job has been classified as a professional position and is therefore exempt, that does not mean the classification is correct. Whether a job is exempt or not depends on the actual work you perform, not just the title of the job. The relevant considerations, depending on the exempt classification being relied upon by the employer, may include whether you have supervisory responsibilities, if you are allowed to exercise independent judgment, whether you have the power to hire and fire other employees, how much you are paid, and how much discretion you have regarding how you perform your job duties.
Similar considerations apply to the misclassification of an independent contractor. This misclassification can result in unpaid overtime and is also often used to deny benefits that an employee would have been entitled to receive if he or she had been classified properly.
Kevin R. Harper is an Arizona employment attorney, representing individuals and small businesses throughout the state of Arizona from his centrally-located office at 1 N. Central Ave., Suite 1130, in downtown Phoenix.