Current employer is claiming all of his salaried employees as "exempt" under the Labor Laws. In reality, none of us are. We don't meet the requirements by the standards set in the laws. I have just recently found out all of this. I am also aware that none of the business is in his name, no one who works for him even knows his real name. He has been known to run shady businesses to avoid paying taxes and I am concerned that he is using the "exempt" employees to avoid paying higher taxes on us. We are in a restaurant industry so we make tips and as salaried employees, none of our tips were ever claimed against our income. I'm looking for ways to know if he is committing tax fraud. I know he's doing it intentionally, I just don't know enough about the laws to say which ones he's breaking.I was salaried at $200 a week, plus tips. I oversaw the daily operations of the bar and restaurant and used to manage 1-6 employees. Now, I only manage one employee, possibly 2 depending on the day. I worked 45-60 hours a week. I had no control over scheduling, ordering supplies, hiring or firing employees, recommending potential employee candidates or changing an employees position within the restaurant. My title was "Floor Manager". By the Labor Law requirements, I'm not an exempt employee. I have never since being employed there, met the requirements. None of my tips that were claimed at the end of my shifts were ever reported to the IRS. I have the W2 showing that. I also have copies of all my pay stubs showing that. He tears off the bottom portion so I have no idea what's on that. I was told to report him to the labor board and the IRS.
No, it is not legal. It is a violation of the Fair Labor Standards Act. All truly exempt employees may be paid on salary and required to work as many hours as necessary. Exemptions may be lost by certain actions. Non-exempt employees whether paid by salary or not, are really hourly employees who must be paid overtime for all hours over 40 each week. You should contact a local wage & hour attorney to discuss the details of your situation.
Contact for a free initial consult. 1-800- 741-1600. Your question contained many subparts including inquiry into misclassification under the FLSA as well as tax ramifications and inquiry into who is actually your employer implicating a concern over fraudulent activity. We have lawyers who can address each one of these discrete questions.
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