Every year, thousands of companies are forced to pay millions of dollars to settle lawsuits claiming that they failed to pay employees overtime pay.
Here are the most common ways employers cheat their employees out of their overtime compensation.
1. Failing to Pay for All the Time Spent Working
The most common violation of the overtime laws is failing to pay for all the time you are working. If you are working for your employer, and your employer knows that you are working, then you must be paid for that work. It does not matter if the work is performed before or after your usual shift or work hours. You must be paid when you do prep work before your shift starts, work through lunch, take a short break of 20 minutes or less, give reports to the person who replaces you on the next shift, help close the workplace after your shift ends, or attend seminars or training classes for your job. You also must be paid for work that you perform at home, such as finishing reports or memos at home, making or answering job-related phone calls at home, and reviewing or responding to emails from home.
2. Failing to Keep Accurate Time Records
If your employer does not track your time with a time clock or other accurate method, or if you end up working “off the clock,” then you are probably being cheated out of overtime pay. The law requires that your employer keep certain wage and hour records for each non-exempt employee. These records include the total hours worked each workday and workweek, daily and weekly earnings, total overtime paid, total wages paid, deductions or additions from wages, and the date of payment for each pay period. The best way to protect yourself is to keep your own record of the time you start work and the time you finish work every day.
3. Averaging Work Hours Over More than Seven Days
Some employers average workers’ hours over a period of more than seven days. Or they give employees “comp time” in one week to make up for another week when they had to work more than 40 hours. This is illegal. You must be paid overtime based on a seven-day week. For example, if you work 50 hours in the first week and 30 hours in the second week, then you must be paid at the overtime rate for 10 hours, even though you worked an average of 40 hours per week.
4. Improperly Classifying an Employee as “Exempt” from the Overtime Laws
Some employees are considered “exempt” from the overtime laws. This means that they do not have to be paid overtime pay when they work more than 40 hours a week. Too often, however, employers wrongly classify employees as “exempt” because they do not understand the law or are trying to avoid paying overtime. Your job title is not important. To be an exempt employee, you must be paid a salary and you must perform exempt job duties as an executive, professional, or administrator. If you don’t meet all of these qualifications and your employer has classified you as exempt, then you may have a claim for unpaid overtime pay.
5. Improperly Classifying an Employee as an “Independent Contractors”
Independent contractors do not receive overtime pay because they are considered self-employed. To qualify as an independent contractor, you must be able to set your own work schedule and decide how the work will be performed. You may also have other clients or customers. If you are required to work in an employer’s workplace according to an employer’s schedule, then you are probably not an independent contractor.