How do I classify employees correctly?

To classify employees correctly can be a challenge. Employees are classified as either

  • exempt from overtime, and are normally paid salary, or
  • nonexempt, and are paid hourly with overtime for over 40 hours in a workweek. 

Classification can be difficult. There are also independent contractors and booth renters, which are not legally “employees.” If there is a disagreement between you and the IRS in how you classified a new hire, a court will decide how your employee will get classified.

Get our infographic to help you easily know the difference between an independent contractor and an employee.