The Fair Labor Standards Act (FLSA) states that anyone employed and covered under this act must be paid one and a half times what their regular rate of pay is when the amount of time worked is over 40 hours in a week. You might be a victim of a violation of this act which is commonly known as “wage-theft.”
A study conducted by the UCLA labor center in 2008, surveyed over 4,000 workers in industries that paid a low wage in Chicago, Los Angeles, and New York City. They found that over 25% of the workers surveyed had worked over 40 hours and that a staggering 76% of these workers were not compensated the wages owed to them.
What Happened To These Workers?
- 73% of these wage-theft victims in the study were only paid their regular hourly rate instead of the time and a half pay that they were owed.
- 19% were not paid a single penny for their time over 40 hours.
- 8% were paid less than their regular wage with a promise of “comp time” or some other type of promise that they would be compensated at a later date. These promises were later not upheld.
Methods Companies Use To Avoid Overtime Pay
1. Trying To Classify An Employee As Exempt From The FLSA
Fact sheet #17A of the FLSA outlines a number of exemptions from this act for certain types of employees. The general idea is to give exemptions for employees who are executives, administrators, professionals, outside sales employees, and sometimes computer professionals. What they are looking for is people who command higher wages and are highly trained to do their jobs. For example, a doctor is exempted under this act.
This way that companies try not to pay for overtime is when they attempt to shoehorn someone into an exemption when they are not salaried at a high enough rate or do not meet the qualifications of someone who is in a skilled position. A common example of this is hospitals trying to get nurses exempted from the FLSA in order to not have to pay them the overtime they deserve.
2. Underpaying Exempt Employees
While you might qualify for exempt status under the FLSA in regards to the line of work, the company might still be underpaying you and owe you overtime pay for any time you worked over 40 hours in the past financial quarter. This commonly occurs when there is incentive pay and nondiscretionary bonuses that determine what employees will get.
If you find that you are making under the amount that the FLSA requires to be exempt, you can either demand that the company compensates you up to that requirement within one financial quarter or you can demand time and a half pay for all overtime.
3. Improper Wage Deductions
The FLSA fact sheet #16 states that it “does not allow uniforms or other items which are considered to be primarily for the benefit or convenience of the employer, to be included as wages. Thus, an employer may not take credit for such items in meeting his/her obligations toward paying the minimum wage or overtime.”
According to the fact sheet, common wage deductions that cannot be taken from your overtime are:
- “A minimum wage employee working as a cashier is illegally required to reimburse the employer for a cash drawer shortage.”
- “An employer furnishes elaborate uniforms to employees and makes them responsible for having the uniforms cleaned.”
- “The cost of an employer-required physical examination cuts into an employee’s minimum wage or overtime”
Tim Becker Partner at Minneapolis’ Johnson // Becker PLLC, and lead sponsor of WageAdvocates.com. He is committed to providing clients effective, aggressive legal representation, and has prosecuted numerous individual FLSA violation claims.