Fair Labor Standards Act – Unpaid Overtime – Unpaid Wages
The Fair Labor Standards Act (FLSA) requires that hourly employees receive overtime pay equal to 1.5 x their regular hourly pay for any hours worked over 40 in a week. An employer may require employees to work overtime hours, but the employer must give the employee overtime pay.
In most circumstances, overtime pay that has not been paid can still be collected up to three years back. And when the employer’s failure to pay overtime is deemed intentional, the employer can be required to pay an additional amount of money equal to the amount owed.
Salaried Workers Who Should be Paid by the Hour
Many employers try to avoid paying overtime by simply paying their employees a salary, even though the employees are working more than 40 hours in a week. In such cases, the employees are still entitled to overtime pay if they are non-exempt. The overtime wages are calculated by dividing the weekly salary by 40 (or a bi-monthly salary by 80) to get the regular hourly rate and then multiplying that by 1.5 to get the overtime rate.
In order for an employee to be paid on a salary, they must be in a job that is exempt from the overtime rules. Those classifications are:
- Executive: To qualify for this type of exemption, employees must manage the operations of a business, department, or subdivision within the company. They must direct and supervise the work of at least two employees and have the authority to hire, fire, and promote. Typically, employees meeting these conditions include your VPs, Directors, and Chief level staff members.
- Administrative: To qualify for this exemption, employees must exercise independent judgment and discretion performing non-manual work that is directly related to business operations. Typically, employees falling under the administrative exemption category include office managers, insurance agents, human resource professionals, and marketing personnel.
- Professional: Employees in this exemption must have advanced knowledge in a field of science or learning through prolonged course of instruction (i.e. university, college, law or medical school). Occupations that require prolonged study include doctors, lawyers, dentists, professors, accountants, and the like.
- Outside Sales: There is no salary requirement for this exemption, mainly because these employees typically work solely on a commission basis. Employees qualify for this exemption if their primary duties involve making sales away from their employer’s physical place of business.
Employers often make mistakes in deciding which employees are exempt and which are not. Sometimes they even try to trick employees into thinking that they are exempt (not entitled to overtime). You may still be entitled to overtime pay even if:
- You are on a salary;
- You have the word manager in your title;
- Your employer says you are an independent contractor (you might not be); or
- Your employer just tells you that you are exempt.
Retaliation for Complaining or Reporting Unpaid Wages
It is illegal for an employer to retaliate against an employee for asking for his overtime pay, for contacting an attorney, or even filing a claim. If you complain of not receiving overtime pay and your employer fires you, you have an additional claim for retaliation.
Comp Time (“Banking Hours”)
The concept of banking hours under Comp Time policies can seem very enticing but in reality, your employer is likely cheating you out of overtime or getting work out of you that you will never be paid for.
First, employers are often cheating their employees from overtime when an employee ‘banks’ an hour. For instance, if you work 42 hours, and you are allowed to bank those 2 hours over 40, you have just deprived yourself of two hours of overtime pay.
Second, employers know that employees don’t always like to take days away from work. What will likely wind up happening is that if you have a large amount of hours in your bank, you will likely keep those hours in the bank and never take the time from work.