During the recent recession those Americans who hung onto their jobs often faced stressful conditions. Theyhabitually worked longer hours for less money or the same pay and may have worked overtime with little or no additional pay.
Overtime often was not compensated properly or employees were reclassified as hourly employees. Seven years after the nadir of the recession in 2008, employees are realizing their rights and bringing more unpaid overtime lawsuits.
In 2014, the Department of Labor recovered nearly $241 million in back wages for employees, up 22 percent from 10 years earlier. The biggest mistake employers made was wrongly labeling employees as exempt from overtime pay.
However, many Americans remain ineligible for overtime. Under the existing rules salaried workers must earn less than $23,660 per year in order to be automatically eligible for overtime pay. That threshold is changing under a new rule brought in this year by the Obama administration.
Your Rights to File an Unpaid Overtime Lawsuit
The Fair Labor Standards Act (FLSA) governs employees who work over 40 hours a week. It’s routinely violated by employers. According to the Department of Labor back in 2008, in excess of 197,000 employees received $140.2 million in minimum wage and overtime back wages because of violations in this legislation.
Violations of the labor laws that govern overtime include the failure to pay employees overtime when they have worked over 40 hours a week, failure to include non-discretionary bonuses when working out overtime pay and the incorrect classification of workers as exempt from overtime when they are not exempt.
Some Common Employer Scams to Avoid Paying Overtime
1 Averaging out an employee’s hours over two work weeks, instead of one;
2 Forcing employers to do “off-the-clock” work;
3 Failing to pay workers for breaks of a duration from 5 to 20 minutes, training, work taken home or being on-call;
4 Giving comp time for overtime: Employers may offer compensation time such as paid leave instead of overtime pay;
5 Failing to pay for travel time: Unless they are exempt, workers who travel during their workdays must be paid for this travel time;
6 Using a prior permission excuse – Employers may deny paying an employee the overtime he or she has earned because the employee did not obtain prior permission to work more hours;
7 Misclassifying employees as exempt – there are many exemptions but some employers mistakenly or deliberately incorrectly classify an employee. This is one of the most significant causes of unpaid overtime lawsuits;
8 Poor Record Keeping: Bad record keeping may be a mistake or way to conceal unlawful practices such as denying an employee the overtime pay he or she has earned.
Exemptions to Overtime
Section 13(a)(1) of the FLSA exempts some executive, professional, administrative and outside sales workers from the FLSA’s overtime requirements if they meet certain criteria in relation to their job duties, in which case they can be ineligible for overtime.
Generally to be exempt an employee must fulfil a two-pronged test comprising a salary basis test and a duties test.
The salary test is met if the employee receives a fixed amount of money weekly, bi-weekly or monthly, and there is no deduction based on the quantity or quality of his or her work.
The duties test differs for executive, administrative and professional employees. It is met when the work is done as opposed to job descriptions.
Exempt positions usually fall into five categories.
3. Professional (teaching and creative professionals)
4. Computer professionals
5. Outside sales
For full details see this Department of Labor fact sheet on overtime exemptions.
Why More Workers Will be Eligible for Overtime
This year President Barack Obama moved to update labor standards brought in in the Fair Labor Standards Act (FLSA) of 1938 – the legislation that introduced a national minimum wage and time-and-a-half pay for hourly and certain salaried workers after 40 hours of weekly work.
The regulation has increasingly become outdated, covering only 8 percent of the salaried workforce. It means employers can ask white collar workers who make more than $23,660 per year to put in long hours without overtime pay. The president’s proposal takes it up to $50,400, approximately $970 per week.
With more workers eligible for overtime, we expect to see more lawsuits brought against employers who have wrongly denied overtime to their employees. Contact us at 713.888.8888 if you feel you have been denied overtime pay.