Every year thousands of employees are improperly denied overtime. The following article provides a general discussion regarding the federal laws that mandate overtime pay.
The Fair Labor Standard Act
The Federal Fair Labor Standards Act (FLSA) was passed in 1938. It requires covered employers to pay employees minimum wage. In addition, the FLSA requires that employers pay most employees overtime compensation for any work done over forty hours a week.
Who Gets Overtime?
All non-exempt employees must be paid one and one half of their regular rate of pay for all work performed in excess of forty hours per workweek. Exempt employees are typically involved in executive, administrative or professional. Generally, exempt employees are the most important, highest ranking or highest skilled workers in the company.
Have You Been Working for Free?
After years of working with employees we have identified several common instances where employers fail to pay overtime to their employees.
· A Salary or Title does not make you Exempt from Receiving Overtime.
In many cases employers and employees assume that because an employee is paid a salary or has a high ranking job title that the employee will be exempt from overtime laws. Few things could be further from the truth. The fact that an employee is paid a salary or is given a job title makes absolutely no difference in determining if the employee’s job is exempt from overtime.
A problem similar to the one immediately above occurs when an employer recognizes that an employee is eligible for overtime pay and then attempts to contractually set a fixed salary that would cover regular and overtime pay requirements. These contacts fail in almost every situation. Regardless of the amount of salary or contractual agreement the Court will traditionally rule that overtime pay rules must be followed.
· Working “off the clock”
Voluntary unpaid over time, donated time or “off the clock time” must be compensated under the FLSA. A manager who expects or allows employees to work unrecorded and uncompensated hours is begging for a lawsuit. It is simply impossible under the FLSA for an employee to waive the right to receive at least a minimum wage for all hours worked and all applicable overtime pay for hours worked over forty in a work week.
· Comp Time instead of Overtime
In most instances, private employers may not provide compensatory time off instead of overtime. Employers may use an informal variety of comp time to insure that an employee does not exceed forty hours per week. However, any overtime worked within a work week must be paid for that workweek. In many instances employers compound this error by providing comp time on a straight time basis instead of at an overtime calculation.
· Independent Contractors
Some employers assume that if they characterize a worker as an independent contractor then they do not have to pay that worker overtime. However, it takes a lot more than a contract to make a worker an independent contractor.
In determining if an employee is an independent contractor, the courts will not rely upon a contract stating that the independent contractor relationship exists. Instead, the courts will look at the following factors:
1) The amount of control and discretion the employer exercises over the manner in which the work is performed,
2) The worker’s opportunity to realize a profit or loss from the work performed,
3) The worker’s investment in equipment or materials required for the job or the worker’s employment of helpers,
4) The degree of skill required to perform the work,
5) The degree of permanence to the working relationship,
6) Whether the services rendered are an integral part of the employer’s business.
Many times employers will hire “contract labor” or “contract employees” and fail to pay them overtime. In reality, these workers could be deemed employees and therefore subject to wage and hour overtime laws.
The rule of thumb is simple; it is not possible to use a contract to overcome evidence of an employment relationship under wage and hour laws.
· Time Spent in Meetings, Training Programs and Travel Time
The general rule is found in the wage and hour regulations, which states as follows:
Attendance at lectures, meetings, training programs, and similar activities need not be counted as working time if the following criteria are met:
a) Attendance is outside of the employee’s regular working hours;
b) Attendance is in fact voluntary;
c) The course, lecture, or meeting is not directly related to the employee’s job; and
d) The employee does not perform any productive work during such attendance.
If all four criteria are not met, then the employee must be compensated for their time.
As to travel time, the basic rule is that any travel on company business that cuts across the normal workday is part of hours worked, regardless of whether the travel occurs on a day the employee is normally scheduled for work. Time traveling between worksites is compensable and should be counted for an overtime pay calculation. This inc
ludes all travel to or from worksite and back again to a main office. If an employee does not have to report back to a main office after work and returns home instead, the travel time to the employee’s home is not compensable.
CONCLUSION
Throughout the United States, employees are being improperly and illegally denied overtime payments. Employees should understand their rights to overtime payments. Do not rely upon your employer.
Hopefully, the information written in this booklet has provided some insight into the issue of overtime pay. The information included above is very general in nature and is no way intended to substitute for a consultation with a legal professional.
Our law firm is dedicated to assisting individuals in wage and hour/overtime actions across the country. We are currently pursuing several collective claims against large employers such as Check N Go. If you have a wage and hour complaint, please contact us directly at (317) 575-9942 or phil@severstorey.com.
Author Phil Sever
Posted in Employment Law
Tags Check N Go, employment legal advice, independent contractor right, overtime, salary positions, wage and hour lawsuit
