The Jimmy John’s Case & The Importance of Employee Classification in California

Beginning in 2014, several managers of corporate-owned Jimmy John’s stores sued the company under the Fair Labor Standards Act (FLSA) claiming that they were misclassified and thus missed out on overtime pay. Last month, the sandwich chain settled the wage and hour claim with the managers for nearly two million dollars.

The classification of workers is a tricky aspect of employment law that is often misunderstood by employers. Being classified incorrectly can mean missing out on overtime pay, benefits and have other legal implications. Davtyan Law Firm wants to help you understand the different types of workers and employees so that you can protect your legal rights.

What Is Employee Misclassification?

Employee classification really covers two types of classification: employee vs. independent contractor and exempt vs. non-exempt employees. Both of these classifications have important impacts on wage and hours laws, overtime pay, and more.

The first distinction is whether a worker is an employee or an independent contractor. Traditionally, most workers were employees, but the gig economy is causing quite the shake-up. The easiest way to determine whether a worker is an employee or an independent contract is by the tax forms they receive. Employees receive W-2 forms, while independent contractors receive 1099 forms. This distinction is important because only employees may be eligible for things like health benefits, minimum wage laws, FMLA leave, and other legally-protected benefits.

The Jimmy John’s case, however, focuses on the distinction between exempt and non-exempt workers. Under federal law, employees are classified as either exempt or non-exempt when it comes to the payment of overtime wages, requirements for rest breaks, and minimum wage. Only non-exempt workers are eligible for overtime pay. Typically, hourly workers are non-exempt. To be considered an exempt employee in California, there are several criteria that a worker must meet to be exempt, which include:

  1. The employee must make twice the state minimum wage for a full-time role. In 2021, that equates to $54,080 for smaller employers and $58,240 for larger employers.
  2. The job duties must include administrative or white-collar duties.
  3. The job duties must include the use of the employee’s independent judgment.

Examples of roles that typically meet these requirements include managers and executive-level workers. Some of these requirements can be tricky sometimes, and employers may try to use this to their advantage. Make sure your rights are being protected by speaking to a California labor lawyer about your classification.

What Should I Do If I Think I’m A Misclassified Worker in California?

If you think that your employer has misclassified you and you may be missing out on overtime pay, you should speak to a California employment lawyer right away about your case. Davtyan Law Firm focuses exclusively on helping California employees protect their legal rights in the workplace. Davtyan Law Firm helps employees all over the state of California including Los Angeles, San Francisco, Sacramento, San Diego, Glendale, and more. If you would like to discuss your labor law matter with a licensed attorney, call us today.

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Based in California, we focus exclusively on employment law, protecting employees' rights. We handle a broad range of employment disputes including wrongful termination, harassment, discrimination, retaliation, wage and hour issues, among others.

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