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August 17, 2010
5 Most Common Exemption-Related Mistakes

In a BLR webinar entitled ‘High-Tech Workers: Who’s Entitled to Overtime and Who’s Not; Avoid the Top 5 Most Common Mistakes’, Allen Kato and Dan Obuhanych discuss five common mistakes regarding workers in an organization. These are the five common mistakes that employers can make:

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  1. Misclassification as unpaid volunteers/interns or independent contractors . Companies need to carefully review the classifications of workers to ensure that they are in strict compliance with the legal requirements. It is usually impossible to have unpaid volunteers in the private sector. However, having too many unpaid volunteers can be a problem
  2. Executives failing to manage two Full Time Equivalents (FTEs). These are actual employees and not independent contractors. Executives cannot be managers of projects but need to manage employees. Employers should beware of giving their managers titles but these managers have no direct reports. The titles may not carry much weight in courts as what is more important is what the employee actually does
  3. Administrative employees having no duties that require independent judgment and discretion
  4. Professional positions not requiring sufficient educational background. A college degree does not necessarily imply that an employee is a professional
  5. Failing to comply with salary basis requirements

Allen M. Kato, Esq., is an attorney in the San Francisco, California office of law firm Fenwick & West, LLP ( His practice concentrates exclusively on representing management in wage and hour, equal employment opportunity, unfair competition and trade secret matters, and privacy matters; and litigating individual and class action wage and hour, wrongful discharge, employment discrimination, and unfair competition matters before courts and agencies.

Dan Ko Obuhanych, Esq., is an attorney in the Mountain View, California office of law firm Fenwick & West, LLP. His litigation practice focuses on labor and employment law, litigating wage and hour suits, unfair labor practice claims, discrimination/retaliation lawsuits, grievance/arbitration matters, and EEOC/DFEH charges.

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