The overtime law states that all employees who are not exempt from the Fair Labor Standards Act (FLSA) must be paid at a rate of one and one half times their regular rate of pay for all hours worked in excess of 40 hours in any workweek. Although this sounds like a simple rule, it’s far from simple. In fact, the overtime laws are incredibly complex, and there are a number of arcane rules and broad exemptions that employers often rely on in an attempt to avoid their obligation to pay overtime. As a result, unpaid overtime is one of the most frequent sources of employee complaints, and overtime class action cases are probably the fastest growing type of employment litigation in our federal court system.
Every year employers in the United States underpay their employees by literally billions of dollars. Nearly every American worker is eligible to be paid (1) minimum wages, which are currently $7.25 per hour, and (2) overtime wages of one-and-one-half times their regular hourly rate.
Only certain high level managers, administrators, and professionals may be paid a salary in lieu of overtime. The exceptions are few and far between. When an employer mistakenly pays a worker by salary or commission, but should have been paying hourly wages with overtime, this is called “misclassification.” An employee who is misclassified may be owed hundreds, thousands, or tens of thousands of dollars in underpaid wages.
The employers most likely to violate overtime laws are smaller businesses such as construction companies, hotels, restaurants, franchised fast food chains, financial services, banking, medical providers, convalescent homes, home health care companies, nurseries, landscaping companies, janitorial services companies, and a lot of other small and large businesses. Even Fortune 500 Companies violate mandatory overtime laws, especially in the retail and computer industries and especially when they mis-classify you as an “Exempt Employee.”
California and most other states implemented wage and hour laws to prevent employers from gaining commercial advantage at the expense of the workers. To enforce their rights, workers must remain aware of the possible causes for a claim, including:
- Not receiving their last paycheck
- Not receiving payment for unused vacation time when employment ends
- Unauthorized paycheck deductions
- Unpaid/non-reimbursed business expenses
- Unpaid wages, bonuses, or commissions
- Insufficient funds in the bank account the wages are drawn from
You should always be paid for the time you work. This includes training and seminars as well as regular work time. If an employer requires you to clock out, you are relieved from work related activities. This is critical in determining if you are exempt under the retail sales exemption. In order to determine what your hourly rate would be, you have to know how many hours you are actually working. So, for example, if you spend 5 hours per week as a car salesman hanging up signs and balloons on cars, you should include those hours when determining if your effective hourly rate is at least the minimum wage. If not, then you are not exempt.
Unpaid overtime claims are just one type of wage dispute handled by our employment law attorneys. Skilled labor lawyers are also able to represent employees in situations involving:
- Purposeful misclassification of employees
- Unpaid hourly wages
- Back pay
- Overtime pay that does not meet state or federal standards
The FLSA mandates that nearly all employees be compensated one and one-half times their regular rate of pay for all hours they work in excess of 40 hours per week. There are also state wage and hour laws that provide similar protections and that forbid certain deductions from employees’ compensation. While these laws protect employees’ rights, employers still attempt to evade their legal obligations in order to maximize company profits. If your employer has denied you compensation or overtime pay, you may have grounds for a wage claim under federal and/or state wage laws.
There are many ways that employers can cheat employees of their hourly wages, often without the employee even knowing they are being cheated. Whether it’s the occasional request to stay an extra hour that then becomes a regular pattern — always without pay — or the “press of business” that means you can’t take your lunch break, failing to pay employees for time worked is illegal.
