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According to
Department of Labor’s audits a large majority of companies are
violating the FLSA. Majority of these companies misclassify their employees
as exempt from overtime pay. The DOL reports very high rates of
general non-compliance with the FLSA.
If you are working
over 40 hours a week; coming to work earlier than beginning of your
“official” workday; staying after you punch out or after the end of
your workday; you are an hourly or non-exempt employee but paid
straight time after 40 hours per week; have a pay systems in which
overtime pay starts after 50 hours per week; your employer averages
your hours over your entire pay period of two weeks or more; you
perform work-related activities during your lunch or other breaks;
or you think your employer is not calculating your overtime
correctly, for example, your overtime does not include the shift
differentials, etc.; or employer is wrongly classifying you as an
independent contractor, your employer may be cheating you out of
your hard-earned money.
Even though businesses like to characterize the violations
of the FLSA as inadvertent mistakes, however, these “mistakes”
almost always benefit the employers rather than the employees. So
it is hard to believe that most of these violations by employers are
just “mistakes,” and not
tricks and
scams used
by the companies to cheat the employees out of their hard-earned
money.
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Off-the-Clock Work
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Miscalculating the Overtime
(Regular Rate of Pay)
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Short Changing Hours
(Working During Breaks)
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Misclassifying Employees as
Exempt
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Compensatory Time (“Comp
Time”) in Lieu of Wages
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On-Call Time
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Not Paying
for Travel Time
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Not
Paying for
Training Time
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Not Paying Wages on Time
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Truck Drivers
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Independent contractor
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Telecommuting Employees
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Special Rules for Other
Specific Jobs or Specific Industries
Under the law, the
term "work” is defined broadly as "physical or mental exertion
(whether burdensome or not) controlled or required by the employer
and pursued necessarily and primarily for the benefit of the
employer and his business." Thus, an employee must be paid for all
hours spent performing work-related duties. Off-the-Clock work is
work that employees perform for which the employer fails to properly
pay.
Some common examples of off-the-clock work are:
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Allowing or
requiring employees to come before the “official start time” and
allowing or requiring employees to perform job related activities,
such as pre-shift meetings, changing clothes or picking up required
safety gear, or gathering tools, or preparing machines or work
stations. In some instances, employer may allow or require
employees to come in and read the company policies, or other
work-related emails, etc. and then “log in” or clock in. Job rules,
productive goals, or pressure from supervisors/managers which
“encourage” employees to come in early or work on their own time.
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Allowing or requiring work-related activities to be done after
the end of a shift, such as clean up, doffing job-required clothing,
putting tools or equipment back, and completing paperwork or other
tasks. |
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Encouraging employees to be team players and be considered
good employees if they are willing to come in early, work through
breaks, stay late, take work home, and work on their own time.
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Allowing or requiring employees to take work home, making
job-related phone calls at home, and job-related "volunteer" work is
usually all compensable work.
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Allowing or requiring budget or
fiscal employees to remain until an official audit is
finished. |
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Requiring or allowing employees
to "stand-by" during short plant
shutdowns. |
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Waiting for work after reporting time or
while on duty. |
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Walking back and forth from the locker
rooms to the production floor after donning and before doffing
required protective gear at a meat-processing plant.
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Waiting to take off the required
protective gear at the end of a work shift at a meat-processing
plant. |
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Washing up or showering, if it is
required due to the nature of the work.
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Under the FLSA, the employer must
compensate employees for all the pre-shift or other time spent by
the employees doing job-related activities, whether or not the
employer wants the employees to be clocked in.
Employers use several
different methods of paying
wages and overtime. But, overtime always must be
one-and-a-half times the “regular rate” of pay. It is quite common for employers to miscalculate the
overtime wages because employers often fail to include the all additional payments made to the
employees in the calculation of "regular rate" of pay. Many
employers pay the overtime at one-and-a-half times the base wage of
the employee and not the regular rate of pay as required under the
law.
An employee's
regular rate must include all payments
(except for certain types of payments excluded by the Act), made by
the employer to, or on behalf of the employee. For example, on-call
pay, bonuses promised for accuracy of work, good attendance,
continuation of the employment relationship, incentive, production
or quality of work, contest prizes, employee lunch or meal expenses
paid by the employer, unless the expense is incurred on the
employer's behalf or for the employer's benefit; shift
differentials; traveling expenses (if they are paid by the
employer), and employer contributions to employee flexible benefit
plans, which are also known as "cafeteria" plans, must be included
in the calculation of the “regular rate” of pay and the overtime
must then be paid on that “regular rate” and not just the base
hourly wage of the employee.
Another reason employers miscalculate the overtime wages is
because the employers wrongly calculate the overtime hours worked.
For example, sometimes the employers wrongly average the hours
worked over the pay period (usually a two-week period. The FLSA
requires that nonexempt employees be paid overtime for all hours
worked over 40 hours in a workweek. The FLSA's workweek for
nonexempt employees is generally a fixed period of 168 hours—seven
consecutive 24-hour periods. Moreover, the FLSA uses a single
workweek as its standard, and does not permit averaging of hours
over two or more weeks. This is true regardless of an employee's
schedule and whether he or she is paid on a daily, weekly, biweekly,
monthly or other basis.
Although, the FLSA does not require employers to provide
rest or meal breaks to employees, however, most employers provide
short breaks as they increase worker productivity and efficiency.
The time spent in such rest breaks of less than 20 minutes must be
counted in hours worked, and thus must be compensated. Additionally,
many employers provide lunch or meal breaks of 30 minutes or more.
During these meal breaks the employees must be relieved of work
duties and the employees must able to use the break for their
benefit. Thus, if the employer regularly requires an employee to
perform job-related tasks (even inactive tasks such as watching a
machine or a computer monitor, etc.), then the lunch break must be
considered hours worked and thus the employer must pay the employee
for the lunch or meal break time. If the meal breaks are frequently interrupted for work and
have other significant restrictions, the meal breaks may be
compensable and thus the employees must be paid for them.
Even though, the
FLSA does not require rest or meal breaks, some state laws require
rest or meal breaks of certain lengths.
Check here to see if your state requires a rest or meal break.
Engaged to Wait: If an
employee is required to wait for some time, say 10 to 15 minutes,
before work becomes available, this waiting time is compensable.
In such an instance, the employee is "engaged to wait" rather than
"waiting to be engaged". Employees must be compensated for all time
spent waiting while on duty unless the employee is completely
relieved of duty and allowed to leave the job or the employee is
relieved of duty until a specific time and that interim period is
long enough for the employee to use for their own purpose.
Certain employees
are exempt from the overtime
provisions of the FLSA. Thus, since
exempt employees don’t have to be paid overtime, employers
often try to fit employees into exempt categories. An employer may
give an employee certain title and consider them exempt from the overtime
requirement. However, it’s not the not title but the job
requirements that determine whether an employee is exempt from
overtime pay. To determine whether you are properly classified as
exempt, examine your specific job duties and responsibilities.
Whether an
employee is exempt or nonexempt depends on
these factor: how much the employee is paid; how the employee is
paid; and what the employee actually does. To be exempt an employee must
be: (1) be paid at
least $455 per week ($23,600 per year), (2) be paid on a
salary basis,
and (3) perform
exempt job duties.
To be exempt under the FLSA, the employee must meet both the salary
basis and the job duties tests.
For all private (non-government) employees, the FLSA
requires that wages
be paid in money. Some employers instead pay employees in
compensatory time ("comp time") off instead of money. Comp time off
in lieu of cash for overtime wages due is not allowed under FLSA for
private employers. This rule applies only to wages for overtime
work.
On-call time is time spent where the
employee must remain available to be called back in to work on short
notice if the need arises. The Fair Labor Standards Act (FLSA)
requires employers to compensate their workers for on-call time when
such time is spent "predominantly for the employer's benefit."
If an employee is required to remain on
call on the premises or close by and cannot
use the time effectively for his or her own purposes is working while "on
call." Courts usually look at several factors to find out if
the on-call time is spent predominantly for the employer's benefit
(and thus must be compensated). Some of those factors are:
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physical restrictions, such as
the employer requiring employees to remain in a fixed
location while on call. |
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the maximum period of time
allowed by the employer between the time the employee was
called and the time he or she reports back to work
("response time").
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the percentage of calls expected
to be returned by the on-call employee.
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the frequency of actual calls
during on-call periods. |
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the actual uses of the on-call
time by the employee, i.e., if the employee is able to use the on-call time for substantial
personal projects and affairs, then court may find this time to be noncompensable under the FLSA.
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The more restrictive the on-call
policy is, the more likely that a court will conclude that the
on-call time is compensable working time. And once the employee arrives at work after
being called into service, all working time must be compensated.
Remember that on-call payments will
increase an employee's regular rate of pay. If the employer pays the
employee for on-call time
(for example, a $50 on-call payment per shift), that compensation
must be included in the employee's
regular rate of pay calculation.
Daily commuting
time to and from home to work is not compensable under the FLSA.
However, any other travel time during the workday is compensable.
That is, if an employee is required to travel on a regularly
scheduled workday, the employer must pay him or her.
Most training time must be paid for by the employers.
There exceptions to this rule if the training meeting the following
conditions:
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If the attendance is outside of the
employee's regular working hours; and
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the attendance is actually voluntary;
and
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the employee must do no productive
work while in training; and
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the lecture, meeting,
or program should
not be directly related to the employee's job.
If any one of these
four requirements is not met, the time must be compensated.
The FLSA requires
that wages be paid "when due," which usually means at the next
regularly scheduled pay day. Sometimes employers pay wages "late,"
i.e., the wages are not paid on a regularly scheduled pay day. Not
paying wages on time is almost like not paying the wages at all.
And an employer that fails to pay wages when due may be liable for
liquidated damages.
Truck drivers who drive in “interstate
commerce” are exempt from overtime under the FLSA, that is, they are
not entitled to overtime. However, in
August 2005, Congress amended the Motor Carrier Act to exclude
coverage of vehicles under 10,001 pounds, which in turn eliminated
their exemption under the FLSA. So if you drive in
"interstate commerce," then you are not entitled to overtime, but
you do not, then you are entitled to overtime.
To be considered driving
in "interstate commerce,” the driver must physically cross state
lines or be carrying goods as part of a continuous interstate
shipment. Thus, if driver physically drives across state lines, he
or she is not entitled to overtime for a period of at least 4 months
from the time of that trip. Additionally, if the driver is carrying
goods that recently crossed state lines and if the shipment is part
of the same continuous movement of the goods, then the entire
shipment will be considered "interstate," even though the driver may
never have driven across state lines. In that case, the driver would
be exempt from overtime. Thus,
if you drive within the state or transport goods within the state,
then you are entitled to overtime for all hours you work over 40
hours in a week.
Another area of abuse is in the wrongful use of independent
contractor status. Since the FLSA only covers "employees,"
some employers wrongly designate workers as contractors in an effort to avoid FLSA's
overtime requirements.
FLSA has one of the broadest definitions of "employee." Most courts
use several tests to determine if a worker is properly categorized
as an independent contractor.
The two more
familiar tests are the "right of control" test and the "economic
reality" test. These tests apply numerous factors to determine
whether the worker is an independent contractor or employee.
Right to Control Test
The right to control
test distinguishes an employee from an independent contractor based
on the extent of control an employer can exercise over a worker. The
more control and supervision by the employer, the more likely the
worker will be deemed an employee. The factors in this test include:
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The extent of
control the employer exercises over the details of the work;
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Whether or not the
worker is engaged in a distinct business or occupation;
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The kind of
occupation, and whether, in the locality, the work is usually
done under the direction of the employer or by a specialist
without supervision;
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The skill required
in the particular occupation;
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Whether the employer
or worker supplies the instrumentalities, tools and workplace;
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The
length of time for which the worker is employed;
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The method of
payment, whether by the time worked or by the job;
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Whether or not the
work is a part of the regular business of the employer;
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Whether or not the
parties believe they are creating an employer-employee
relationship; and
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Whether or not the
worker does business with others.
Economic Reality Test
An administrative ruling
by the Department of Labor (DOL) summarized the economic reality
test by stating that "an employee, as distinguished from a person
who is engaged in a business of his own, is one who, as a matter of
economic reality follows the usual path of an employee and is
dependent on the business which he serves." The courts have founds
the following six factors significant in determining whether the
worker is an employee or independent contractor:
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A limited amount of
the worker's investment in facilities and equipment;
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The nature (close
supervision) and degree of control (high) retained or exercised
by the company;
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The worker's limited
opportunities for profit and loss;
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The small degree of
the worker's independent initiative, judgment, and foresight in
open market competition with others required for the success of
the operation;
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A high degree of
permanency of the work relationship; and
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The broad extent to
which the services are an integral part of the company's
business.
Other courts
interpreting the FLSA under the economic realities test also focus
on how dependent the worker is on the company for continued work.
Unlike an employee, an independent contractor does not depend solely
on the company for economic stability and can, and often has to,
pursue other jobs.
The regulations issued under the FLSA have long
required employers to compensate employees for work performed off
the worksite, even if performed at the employee's home. In today's
electronic age, many employees often "telecommute."
If an employer permits telecommuting, then it's the employer's
responsibility to monitor the employees' hours worked. If the
employee is working more than 40 hours in a workweek, including
hours worked at home, the employer must pay the employee the
overtime due for all hours worked over 40 in a week.
There are some scams and violations particular to certain
industries or jobs. For information on
common violations in
particular industries or for particular job descriptions,
click
here.
If you believe you may have a wage and hour claims,
questions, or concerns,
Please feel free to
contact us
at:
1-888-MYWAGE-2
(888-699-2432) or 801-269-9541
or Email us at:
sharon@sharonprestonlaw.com
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