Wage and Hour Laws: Common Types of Wage and Hour Violations
The United States has a group of laws designed to protect the rights of employees in their places of employment. These laws, known as the Fair Labor Standards Act, protect the rights of employees regarding pay and hours worked and are enforced by the Wage and Hour Division of the United States Department of Labor. The Fair Labor Standards Act (FLSA) establishes minimum wage, overtime pay, record keeping, and youth employment standards affecting employees in the private sector and Federal, State, and local governments. The Act categorized workers into two distinctions: exempt and non-exempt workers. Exempt workers are defined as those who are paid a salary, such as executives, administrators, professionals, external salespeople, and people who do computer-related work. Workers who fall into this category are exempt from earning overtime, seeing as they are paid on a salary basis. There is, however, a minimum amount they must earn annually.
Non-exempt workers do not fall into any of the above categories, and are thus entitled to earn the federal minimum wage and overtime pay when required. They are entitled to make no less than $7.25 per hour and overtime pay at a rate no less than one-half times the regular pay rate after 40 hours of work in a workweek. Unfortunately, not every employer obeys this Act’s dictates, and employees end up getting paid far less than they deserve. Some unscrupulous employers do this in subtle ways that their employees do not have the faintest idea that they are being cheated. This article highlights the common types of wage and hour violations and what you can do about it if any of the listed types apply to your situation.
Wage and Hour Laws: The Fair Labor Standards Act
The Fair Labor Standards Act established the minimum amount workers were entitled to earn for their work. The Act categorized workers into two categories, with overtime pay determining which type into which they fell. They either fell into the category that was exempt from overtime pay, which was the category of salaried workers, or they fell into the category of wage earners and thus were non-exempt from overtime pay.
Employees that the FLSA classified as exempt are those whose jobs fall into any of the following categories:
- Outside sales
These employees are exempted if paid by salary instead of hourly and earn at least $684 weekly or $35,568 annually. Employees that fall into this category enjoy a few benefits, such as the security of a steady paycheck and access to extra remuneration. Additional remunerations include IRAs, 401(k) plans, pensions, bonuses, employer-sponsored healthcare plans, sick days, and paid vacation time. Because of these extra, exempt employees are not eligible for overtime, and their bosses typically fix their work hours.
Typically, non-exempt employees are those who:
- Do not earn up to $684 per week;
- Are directly supervised by others who manage the workflow; and
- Cannot be employed into any of the positions an exempt employee may fill.
Non-exempt employees are paid hourly wages and must receive overtime of up to one and half times more than their hourly wage for every hour of overtime. Under the FSLA, which is a federal law, non-exempt employees in the United States must earn a minimum wage of $7.25 per hour. However, states and local governments may fix their own minimum wages on the condition that the wage is not lower than the federal government’s own. Also, if an employer is subject to federal and state minimum wage requirements, they must pay the higher of the two.
Common types of wage and hour violations
Unfortunately, not every employer is fair enough to meet the standards set by the law, and we have many employees who are not getting paid for the hours of work they put in. This crop of unscrupulous employers spans large corporations and small businesses, cheating employees of their rightful pay, sometimes employing tactics that are so subtle that the employees are not aware of how much they are losing.
While wage theft is common among shift workers and those in the service industry, it is also committed against employees in salaried jobs. Some ways in which employers cheat their employees out of their wages are:
- Minimum wage violations: whether an employee works a whole 40-hour week or less, they are entitled to minimum wage pay for the number of hours they worked. An employer has no right to make out of deductions out of an employee’s wages for costs that should rightfully be borne by the employer, such as overhead, employee taxes, and other expenses.
- Overtime pay violations: an employer can violate overtime pay provisions either by classifying the overtime pay incorrectly or miscalculating it. Workers in the service industry, home healthcare, and other jobs that pay hourly are commonly on the receiving end of overtime pay violations.
- Misclassification of workers: misclassifying employees is a common tactic companies, and business owners use to cut costs. Classifying a worker as an independent contractor instead of a formally hired employee allows employers to dodge the payments of benefits to their employees and the payroll taxes that come with them.
- Unpaid “Off the clock” work: employers sometimes require their employees to perform job-related tasks without pay before or after their shifts or when they are supposed to be on break.
- Employee payroll debit card fees: the use of prepaid debit cards to pay employee wages is becoming popular among employers. While this is a laudable move, as it is an immediate and convenient payment method, it is not without a few costs. These costs revolve around the use of the cards by employees, and they should be borne by employers or at least have their employees compensated for the expenses. If an employer neglects to do this, they would be guilty of wage theft.
- Improper record keeping: the Wage and Hour Division of the U.S. Department of Labor requires that employers keep accurate records of their employee’s wages and pay. By keeping inaccurate records, employers rob their employees of their rightful wages and overtime pay.
- Uncompensated meal breaks: forcing employees to work through meal breaks or interrupt their meal breaks without compensation violates federal and state meal break laws.
- Tipped minimum wage violations: the FLSA has provisions concerning tipped employees. Here, employers must ensure that their staff is paid the minimum wage unless they receive more than $30 in tips monthly. If the employee’s pay plus tips do not make up to the minimum wage, employers are expected to make up the difference. When an employer fails to pay the difference or confiscates their employee’s tips, they are guilty of wage theft.
What to do when you suspect that you have been a victim of wage theft
If you or someone you love has been a victim of wage theft, you should know that you have the right to challenge your employer for their unfair labor practices. You also do not have to fear retaliation from them for calling them out on their wrongdoing, as it is illegal for them to retaliate or discriminate against you in any way. Reach out to a competent and experienced employment attorney who will work on your behalf to ensure that you are fully and fairly compensated for your lost wages and any other damages you suffered due to your employer’s negligence.