Wage-and-hour exposure is usually not about pay rates. It is about whether people who should have been paid overtime were treated as exempt.

Exemption generally requires all of: payment on a salary basis, at or above a minimum salary threshold, and performance of exempt duties. All three, not any one.

Salary basis means a predetermined amount not subject to reduction for variations in quality or quantity of work. Docking an exempt employee’s pay for partial-day absences can destroy the exemption — sometimes for an entire class of employees, not just the one docked.

The threshold is set by regulation and changes; an exemption valid when the salary was set may not survive an increase in the threshold.

Duties is where most misclassification lives. The common exemptions — executive, administrative, professional — each have specific requirements, and the analysis turns on what the person actually does day to day, not on their job title. “Manager” in a title proves nothing. Whether they genuinely supervise two or more employees and have real authority over hiring and firing does.

The exposure compounds: unpaid overtime, often liquidated damages, attorneys’ fees, and a limitations period measured in years. And because classification is applied to a role rather than a person, one misclassified position is usually several employees and a potential collective action.