Wage & Hour Violations Unfairly Impact Hard-Working Employees
The fact of the matter is, wages and job benefits are among the most important employment-rated concerns for workers throughout the United States, which is why federal and state wage and hour laws provide basic protections for those workers. Of course, even with these laws, some employers – especially those for whom the bottom line is more important than the welfare of their workforce – try to save money by violating them. And when they do, workers need help in fighting to make sure the law is followed. Of course, you should never face down an employer over a wage and hour violation without a lawyer, but you should also be aware of your basic rights provided by these laws yourself.
Over many years, federal and state laws concerning wages and fair pay have evolved significantly, as have the rules governing employee benefits. Since many of these laws are difficult to understand, here is a basic overview of what these laws entail. The Fair Labor Standards Act (FLSA) sets the standards that all employers must follow to be compliant with the law.
Our office commonly sees wage and hour violations in the form of the following:
- Unpaid Minimum Wage
- Failing to Pay for all Hours Worked
- Employee Misclassification
- Miscalculated Overtime
General Wage & Hour Laws Overview
Minimum Wage Laws
Federal and Ohio state laws set out in detail the minimum wage every worker is entitled to receive. Nationally, the federal minimum wage is $7.25 per hour, or $2.13 for tipped workers, which will be explained shortly. However, in Ohio, the minimum wage is $8.30 per hour, or $4.15 per hour for tipped workers. Federal and Ohio laws both require employers to pay minimum wage for every hour worked in every pay period. When an employer fails to honor a worker’s rights, they are violating the law.
Minimum wage laws also identify which workers are entitled to receive overtime pay for working longer hours. Unfortunately, whether it is intentional or not, many employers fail to comply with these legal requirements. Among the most common violations of the law related to employment wages include:
- Failing to pay the legal minimum wage for all hours worked;
- Paying the lower “training wage” or the “youth minimum wage,” when they don’t apply, and workers should be paid more;
- Failing to pay overtime for every hour worked over 40 in one 7-day period;
- Failing to properly classify non-exempt employees;
- Making workers do their jobs “off-the-clock,” without paying them for that work;
- Deducting too much for tips;
- Deducting for wages paid in meals or food.
The overall purpose of the wage and hour laws is to protect the rights of employees and to ensure that their employers treats them fairly. The “wage” portion of these laws ensure that workers are paid for all work the employer profits from. They are entitled to the minimum wage in payment for all work done on the employer’s behalf.
In most cases, workers are entitled to be paid one-and-a-half times their standard hourly rate for any hours over 40 in a given seven-day period. Both state and federal laws may apply when it comes to determining whether an employee is entitled to overtime pay. Obviously, one of those laws is the FLSA, which is the federal law establishing the right to overtime wages. However, most states also have laws concerning wages and overtime, as well.
That does not mean everyone is entitled to overtime in all cases. In fact, those who are exempt from the FLSA on the minimum wage are also exempt from overtime protections. Among the most common jobs not entitled to FLSA overtime protections include:
- Independent contractors
- Computer specialists (who earn at least $27.63/hr.);
- Outside salespeople, who work outside the business and who work largely without supervision;
- Baby sitters and other informal personal companions (not including those offering nursing care or domestic work)
- Workers in amusement parks;
- Those who deliver newspapers;
- Small farm employees.
Some workers are considered by law to be “exempt employees,” which means the minimum wage and overtime laws don’t apply. However, these types of workers are the exception, rather than the rule.
The FLSA and Tipped Employees
Wage and hour laws covering employees who receive tips are a different animal altogether than other types of workers. Tipped workers are those who receive more than $30 per month in tips. While employers are required to pay tipped employees the minimum wage, they are permitted to factor tips into their wage obligation in most states. This is referred to a “tip credit.” That means, tipped employees nationwide are entitled to a minimum wage of $2.13 per hour, but they are also entitled to more than that, if their tips don’t come to at least the $5.12 per hour needed to get them to at least $7.25. In Ohio, tipped workers are entitled to at least $4.15 per hour, or more if their tips don’t bring them to at least meet the $8.30 per hour minimum wage.
There is another factor to consider. For any employer to legally use the tip credit, they are required to follow a specific set of rules involving disclosures to the worker. That means the employers must always disclose to every employee their rights under wage and hour laws, including the right to a minimum wage, their right to retain all tips received and their right to expect the employer to make up any deficiency needed to make their pay compliant with state and federal minimum wage laws.
There is no federal requirement for frequency of wage payments, but most states, except for South Carolina and Alabama, have one. Ohio is no exception; according to state law, non-exempt workers must be paid at least semi-monthly, or twice a month. Therefore, when an employer fails to pay any employees at least the minimum wage for Ohio, or they do not supply them with correct and prompt payment at least twice per month, they are violating that workers’ rights under the law.
It is worth discussing here that the common situations resulting in minimum wage underpayments also can and usually do affect overtime pay due. For instance, if your meal break is being illegally deducted from your time sheet and that deduction takes you from 42 to 39 hours worked in a week, you could have both a minimum wage and an overtime pay violation. The same can be said of underpayments to commissioned employees, employees charged for expenses on their paychecks, etc.
I’m Earning Less than Minimum Wage after Charges and Expenses Were Deducted from my Paycheck
Whether or not your employer can deduct charges and expenses from your pay will largely depend on if that deduction will render your wages below the state’s minimum wage. Under Ohio law and the federal Fair Labor Standards Act (FLSA), an employee must be paid the minimum wage for all hours worked in a work week.
So, if you work 40 hours in a work week, you must be paid at least $8.30/hour (the current minimum wage in Ohio) for the 40 hours you worked, or a total $332 (40 x $8.30).
This $332 must be paid free and clear unless:
- The deductions being made are for state or federal taxes, such as Social Security taxes, Medicare taxes, and federal or state income tax withholdings
- You have authorized your employer to make deductions for insurance premiums, union dues, charitable donations or to be given to other third parties
- Your employer has been ordered to deduct wages pursuant to a garnishment order, wage attachment, bankruptcy proceedings, or trustee process.
What Cannot Be Deducted From My Paycheck?
Most importantly, your employer cannot deduct charges and expenses from your paycheck if doing so will reduce your wages below the state’s minimum wage. This is true whether your employer deducts these charges and expenses directly from your paycheck or requires you to directly or indirectly “kick back” all or any part of your paycheck to pay for items, such as:
- Tools and material needed to perform your job
- Cash register shortages
- Damage to company property
- Money lost due to a customer skipping out on a bill
- Money lost due to negligence in performing your job
What Can I do if I’m not Making Minimum Wage Due to Deductions?
There are instances where your employer may be legally obligated or you voluntarily request them to make certain deductions from your pay. However, other deductions cannot be made if they will result in you not being paid the minimum wage for all hours worked. Your employer may, deduct some charges and expenses from your paycheck as long as the wages you are paid for the hours you worked remain equal to or greater than the state’s minimum wage.
For more information, contact Tittle & Perlmuter: Ohio Overtime Lawyers at 216-285-9991, or visit our contact page to schedule a free consultation with an experienced attorney. You may be entitled to file a claim against your employer to recover double your unpaid wages.
When is it Legal for your Employer to Make Auto-Deductions for Meal Breaks?
The Fair Labor Standards Act (FLSA) does not require that employees be provided with meal periods or rest breaks during work time. However, employers are allowed to provide meal breaks and rest periods to employees. When employers choose to provide meal breaks, which are defined as breaks from work of 30 minutes or more, they do not have to compensate employee for the time away from work. However, in order to deduct for meal periods, the employer must ensure that certain requirements are met. Specifically, the meal period must be a “bona fide” meal period in order for an auto-deduction to be lawful.
If your paycheck shows an auto-deduction for a meal period and you believe you were not provided with a bona fide meal period, an Ohio employment law attorney can help.
What is a Bona Fide Meal Period?
A bona fide meal period is a meal break from work that lasts 30 minutes or more, during which time the employee is completely relieved of workplace duties. To be clear, in order for a break from work to be a bona fide meal period, under the FLSA (29 C.F.R. § 785.19), the employee must be allowed to stop working entirely in order to eat a regular meal.
If the employee is required to perform any work duties at all during a meal break, then it is not considered a bona fide meal period under the FLSA.
When Meal Periods with Auto-Deduction May Be Unlawful
The auto-deduction refers to a practice in which an employer automatically deducts the 30-minute meal period from the employee’s paycheck. Generally speaking, an auto-deduction from an employee’s paycheck can be lawful as long as the employee is given a bona fide meal period where they are completely relieved of workplace duties.
For example, during a bona fide meal period, an employer cannot ask an employee to perform any duties related to the job, such as answering phones or even signing his or her name to a document.
If an employer uses an auto-deduction but the employee has been required to perform any work duties at all during the meal break, then it is not a bona fide meal period and the auto-deduction may be unlawful.
Contact an Ohio Employment Law Attorney
If you had meal periods deducted from your paycheck but were required to perform work duties during that meal break, you should speak with an Ohio employment law attorney about filing a claim. Contact Tittle & Perlmutter to learn more about how we can help.
Do You See Payment Deductions for Short Breaks in Your Paycheck?
Under the Fair Labor Standards Act (FLSA), Ohio employees have many rights with regard to wages, overtime compensation, and other workplace matters. However, the FLSA does not require employers to provide meal periods or short breaks to employees. When an employer chooses to provide short breaks to employees—those lasting between 5 and 20 minutes—the employer cannot deduct that short break from the employee’s pay.
If your paycheck shows a deduction for a short break, you should discuss your options with an Ohio employment lawyer.
What is a Short Rest Break Deduction?
Under the FLSA, a short rest break is considered work hours. In other words, any short break thats last 20 minutes or less constitutes compensable work time, and non-exempt employees must be paid for such short rest breaks.
Short rest breaks are distinct from bona fide meal periods. Unlike short rest breaks, bona fide meal periods are not compensable work time. Since rest breaks are considered work hours, employers are allowed to ask employees to perform some work-related tasks during the rest break. This is significantly different from bona fide meal periods in which employers cannot require the employee to do any work at all. A short break deduction is an unlawful deduction from your paycheck for a rest break that lasts 20 minutes or less.
If a short rest break lasts longer than 20 minutes, however, your employer might say that what you perceived as a rest break was in fact a bona fide meal period for which the employer can make deductions from your paycheck.
What Should I Do If My Rest Breaks Were Deducted from My Paycheck?
There are no circumstances in which an employer is permitted to deduct for a short rest break that lasts for 20 minutes or less. While state laws can allow employers to provide more rights than those listed within the FLSA, an employer cannot go below the minimum requirements of the FLSA.
For example, your employer cannot deduct 20 minutes of pay from your paycheck if you took a quick rest break from your job. As such, if you realize that your employer automatically deducted for one or more short rest breaks, you should learn more about filing an FLSA claim.
Discuss Your Case with an Ohio Employment Law Attorney
Unpaid Minimum Wage (Commissioned Sales)
Federal and state laws require all nonexempt employees to be paid the state or federal minimum hourly wage (whichever is greater) for all hours they work in a seven-day workweek.
Although the minimum wage is stated in terms of hourly pay, this doesn’t mean it applies only to people that are paid by the hour. In fact, many sales employees are paid entirely or partly based on the commissions they earn. These are called commissioned sales employees.
It’s quite alright for your employer to base your pay on commissions as long as the amount of pay you receive on each paycheck – when divided by the number of hours you worked – is at least equal to the minimum wage. In Ohio, the minimum wage is currently $8.30/hour.
If you are nonexempt and your pay is based entirely on the commissions you earn and you sold nothing this week, you are still entitled to get paid at least the minimum wage for each of the hours you worked. So, if you worked 40 hours this week, but sold nothing, you would still be entitled to receive $332 ($8.30 minimum hourly wage x 40 hours worked) in pay for the week.
If you are a commissioned sales employee and you are not being paid at least the minimum wage every workweek, you may be eligible to file a claim against your employer that would entitle you to recover unpaid minimum wages and an equal amount in liquidated damages, as well as, your court costs and attorneys’ fees.
For this reason, many employers pay their commissioned sales employees a weekly or biweekly ‘draw’ in order to ensure that they are at least receiving the minimum wage on each pay day for all hours worked during that pay period. Then later, when the employee earns a commission, the employer deducts the amount of draw the employee was paid from his or her paycheck.
It bears mentioning that many sales employees are considered “outside sales employees” and are exempt from minimum wage and overtime wage requirements. If you have questions about whether your job would be considered “outside sales,” call an experienced unpaid wage attorney.
Tittle & Perlmuter: Ohio Unpaid Wage and Overtime Lawyers
If you are not being paid at least the minimum wage for the hours you work, or if you simply want to know more about unpaid minimum wages, call the Tittle & Perlmuter: Ohio Unpaid Wage and Overtime Lawyers at 216-285-9991, or visit our contact page to arrange a free consultation. We can evaluate your case and explain your options.
My Employer Fails to Pay Me for Pre- and Post-Job Duties
A common misconception by employees is that they are required to do certain work tasks before they clock in for work (pre-shift) and after they are clocked out (post-shift) and not receive compensation for their time. However, it is unlawful for your employer to require you to work any length of time without being paid for it.
Can My Employer Make Me Work Off-the-Clock Before or After a Shift?
Requiring an employee to work “off the clock” pre-shift and/or post-shift is one if the most common ways employers try to avoid paying an employee for all hours worked and is prevalent in certain industries. For example, if you are a line cook in the fast food industry you may be required to show up early and cut vegetables or clean your station before your you clock in. In the banking industry, you may be required to clock out and then complete certain paperwork.
A similar example would be when you work in a casino and you are required, as part of your job, to put on certain clothing before work––a costume or uniform, for example. Although your employer may disagree, the time that you spend putting on this clothing and then later taking it off is compensable work time.
The laws say that you must be paid for all hours worked. This includes anything that you do or undertake that is essential to your job and primarily for your employer’s benefit. Any failure on the part of your employer to pay you for all hours worked can entitle you to file a claim against your employer to recover back pay and liquidated damages and to be reimbursed for your attorney’s fees and legal costs.
Unpaid Wages for Time Spent Putting on and Taking Off Protective Clothing and Safety Gear
Unfortunately, many employers try to save money and increase their profits by failing to pay their employees for all hours they work. It seems like this should be obvious to employers, but that practice is unlawful under both state and federal laws, and it occurs more than you might think. A common example of this occurs in the food processing and manufacturing industries where employees are legally obligated to put on (donning) and later take off (doffing) uniforms, protective clothing, and safety gear on their own time.
Donning and Doffing
Requiring workers to wear uniforms, aprons, hair nets, beard guards, or protective clothing and safety gear, such as steel-toed boots, safety glasses, and hardhats is a must in the more hazardous workplaces because doing so prevents injuries and the spread of illnesses to both workers and consumers. However, many employees in these industries are required to “don” this gear before they clock in and later “doff” them after they have already clocked out. This can require a significant amount of time depending on the distance between the time clock or production floor and the changing room, as well as, the time it takes to actually don or doff the gear.
In the workplaces where employers deprive their staff of wages earned, in order to be on time and work a full shift, workers must arrive at the facility earlier than their scheduled start time and leave later than their stop time. For instance, if you need 30 minutes to don your uniform and safety gear before each shift and then another 30 minutes after you have clocked out to doff this gear before you can go home, you will need to spend an extra 1 hour of your own time at work each day. Over many weeks, months, and years, this time at work donning and doffing uniforms and safety gear can add up to a substantial amount of unpaid time and lost wages.
Employment Law & Donning and Doffing
Both federal and state laws that protect workers by addressing the donning and doffing issue. The federal Fair Labor Standards Act (FLSA) requires employers to compensate workers for any and all time they spend in activities that are principal to the job they perform. This includes donning and doffing uniforms, protective clothing, and safety gear before and after work.
So, if you are not being compensated for the time you spend putting on and taking off your uniform and safety gear before and after your shift, you are not being paid for all the hours you work and may be entitled to file a claim against your employer for unpaid wages, plus liquidated damages and attorney’s fees.
How The Attorneys at Tittle & Perlmuter Can Help
When a particular employment policy negatively affects a large group of employees, a class action lawsuit can be filed to recover unpaid wages and overtime pay for the entire group.
In a class action lawsuit, a single lawsuit is filed on behalf of all of the workers affected by this policy, which is then handled by a single team of attorneys, like the attorneys at Tittle & Perlmuter.
We understand how unpaid wages can have a negative effect on the lives of the worker and his or her family, and how helpless a worker can feel when they know that they are being taken advantage of by their employer, but are afraid that they might lose their job if they speak up.
We also know that every employee has the right to fair pay for an honest day’s work and the right to pursue a cause of action against an employer who is not treating them fairly.
If you believe that you are not being paid fairly for the time you spend at work and that your employer is taking advantage of you, call Tittle & Perlmuter: Ohio Unpaid Wage and Overtime Lawyers at 216-285-9991, or visit our contact page to arrange a free consultation, where we can discuss your situation and you can find out how we can help.
Inaccurate Timekeeping of Hours Worked
State and federal wage and hour laws require covered employers to keep certain records regarding their nonexempt employees. The employer is allowed to decide how these records will be kept as long as they are kept accurately and include specific information regarding the number of hours their employees work and the wages they earn.
This information must also include:
- The employee’s:
- Social Security number
- Birth date (if the employee under is the age of 19)
- The time and day the employee’s work week starts
- The number of hours the employee worked each day
- The number of hours the employee worked each week
- How the employee is paid––by the hour, by the day, by piece, etc.
- The employee’s regular hourly rate of pay
- Total straight time wages the employee earned
- Total overtime pay the employee earned
- Any additions to the employee’s earnings
- Any deductions from the employee’s earnings
- The total wages earned and paid to the employee each pay period
- The date the employee was paid and for which pay period.
Inaccurate timekeeping by your employer can result in you not being paid for all of the hours you have worked and/or the actual amount of overtime pay you earned and may entitle to file a claim against your employer to be compensated for your unpaid wages and more.
Call Tittle & Perlmuter: Ohio Overtime Lawyers
If you believe that you are not being paid for all hours that your worked because of inaccurate timekeeping on the part of your employer, contact Tittle & Perlmuter. You may be eligible to file a claim to recover your unpaid wages, as well as, an equal amount in liquidated damages and your attorney’s fees. To schedule a free consultation, call us today at 216-285-9991, or visit our contact page here.
My Employer Unfairly Rounds My Hours
State and federal laws require your employer to keep track of the number of hours you work and to pay you for all hours worked. Under the federal Fair Labor Standards Act (FLSA), your employer is allowed to round the number of hours you worked up or down to the nearest 5, 10, or 15-minute interval, so long as the record keeping practice is accurate and the rounding policy is fair.
How are Rounded Hours Kept Fair?
By “fair,” the FLSA means that time worked must be rounded in both direction––not always down in your employer’s favor. For example, if your employer’s time rounding policy is to round to the nearest 10-minute increment and you worked 44 minutes, your employer can round this down to 40 minutes worked. But, if you worked 47 minutes, your employer must round this up to 50 minutes worked.
Likewise, if you clocked in at 8:02, your employer can round your start time down to 8:00. But if you clocked in at 7:57 your start time must be rounded up to 8:00, not down to 7:50. This way, the rounding averages out over time and neither the employee nor the employer is compromised.
To be lawful, your employer’s time rounding policy must average out so that, over time, you are compensated for all of the time you actually worked. Your employers’ time rounding policy cannot result in you getting underpaid.
A failure by your employer to pay you for all hours worked may entitle you to file a claim against your employer to be compensated for your unpaid wages and overtime and to be awarded liquidated damages and reimbursement of your legal fees.
Contact Tittle & Perlmuter: Ohio Overtime Lawyers
Though it may seem that the amount of time you may lose to an unlawful time rounding policy on any given workday is insignificant, it can add up to a substantial amount of unpaid wages over the course of many months or years.
If you have reason to believe that your employer’s time rounding policy is unfair and that you are not being paid for all hours work, call Tittle & Perlmuter at 216-285-9991 or visit our contact page to arrange a free consultation, where we can evaluate your case and advise you further.
Timesheets to Keep Track of Hours Worked
The federal Fair Labor Standards Act (FLSA) requires employers to keep certain employment records for their nonexempt employees, including the number of hours they logged each workday and the number of hours they logged each workweek.
An employer may use whatever method they choose to keep these records (timesheets, time clocks, automated time tracking systems, etc.) and may even allow a supervisor or the employees themselves to keep track of the hours they worked.
It is, however, the employer who is ultimately responsible for the accuracy of these records. Therefore, the law permits employers to make edits to an employee’s timesheet to ensure that it is accurate.
When Can Your Employer Edit Your Timesheet?
The FLSA allows your employer to edit your timesheet, but only in certain situations. For instance, when you forget to clock in or to log your start time for the day, or to record a day when you called in sick.
On the other hand, it is unlawful for your employer to edit your timesheet so that it shows fewer hours than you actually worked. For instance, your employer cannot edit your timesheet in order to reduce the hours you worked in a given workweek from 45 to 40 in order to avoid having to pay you overtime. This is true even if you give your employer consent to do so.
An employer who engages in the practice of editing employees timesheets in order to avoid having to then pay them for all hours worked will be subject to both civil and criminal penalties. In fact, wage and hour lawsuits alleging that an employer did not pay an employee for all hours worked are very common. In these lawsuits, an employer who is found to have unlawfully edited an employee’s timesheets are typically held liable to the employee for back pay, liquidated damages, attorneys’ fees, and court costs.
Contact Tittle & Perlmuter: Ohio Overtime Lawyers
If you believe that your employer has been unlawfully editing your timesheets so that you are not being paid for all hours worked, call Tittle & Perlmuter at 216-285-9991, or visit our contact page to arrange a free consultation. We can help you recover unpaid wages and overtime and ensure that your rights under both federal and state wage and hour laws are protected.
What Types of Travel is Eligible for Payment?
Should I Get Paid for Time Spent Driving For Work?
Wage and hour regulations become confusing when the issue involves dealing with travel time for nonexempt employees and when this travel time compensable. The confusion is due in part to the number of situations involved in travel for work. Typically, whether an employee should be paid for travel time depends on whether the travel is commuting time or intraday travel.
Can I Get Paid for my Commute to Work?
The federal and state wage and hour laws require employers to pay employees for all work time. However, regular travel time to and from work is not considered work time and is, therefore, not compensable. In other words, your employer does not have to pay you for traveling to and from your home to the job before and after work each day. This is true whether you work at the same location every day or a different location each day.
Can I Get Compensated for Travel During the Work Day?
There are instances when travel time is considered work time and is, therefore, compensable. Under the Department of Labor’s “continuous workday” rule, an employee must be paid from their first principal work duty of the day to their last principle work duty. This means that travel time between the start and end of your work day (intraday travel) is compensable.
So, if your regular workday begins at 8:00 am when you clock in and ends at 5:00 pm when you clock out, any traveling you are required do within that time is compensable. Furthermore, while normal travel from home to the job site and from job site to home is not compensable, if you are required to stop by your employer’s facility first to pick up tools, materials, or instructions before going to the job site, then the travel to the employer’s facility or the first job site is compensable.
It is the same situation on the other end. If at the end of the day you are required to go back to your employer’s facility to drop off tools or materials prior to going home, then the travel time from the job site to your employer’s facility is compensable.
Do Employers Pay for Travel for One-Day Trips?
Compensation becomes more complicated when you are required to travel out of town. If you normally work at one location and are required to travel out of town on assignment and return home on the same day, then the extra travel count towards work time and is compensable. However, your employer can subtract your normal commute time from the extra travel time during your one-day trip. This is true for any out of town, one-day trips where you leave in the morning and return the same day.
Compensation for Travel Time
Travel time that accumulates all within a day’s work is compensable. This includes situations where an employee travels from job site to job site, as well as, one-day assignments out of town where you leave in the morning and return later that day. However, standard commuting time to and from work is typically not paid for.
Contact Tittle & Perlmuter: Ohio Overtime Lawyers
Uncompensated travel time can amount to a substantial amount in unpaid wages and overtime pay. If you have any questions about whether or not you should be paid for your travel time, call Tittle & Perlmuter: Ohio Overtime Lawyers at 216-285-9991, or visit our contact page to schedule a time to speak with a knowledgeable attorney. We can assist you in recovering what your employer has failed to pay you.
Common Situations Where Unpaid Overtime Occurs
Our office oftentimes sees cases where employees experience unpaid wages, especially when it comes to overtime, due to the fact that an employer is not familiar with all the details of wage and hour laws. Common instances where unpaid overtime happens is when an employer misclassifies an employee as an independent contractor instead of an employee. In addition, overtime wages go unpaid when an employee is misclassified as being an exempt manager, or meeting requirements for a professional, administrative, or computer exemption.
The Fair Labor Standards Act (FLSA) is the federal law that guarantees employees the right to be paid the minimum wage and overtime pay for all hours they work in excess of 40 in any given work week. Under the FLSA, an employee is either classified as nonexempt (entitled to overtime pay) or exempt (not entitled to overtime pay).
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Employees Failing the Salary Basis Test Misclassified as Exempt from Overtime
Most private sector employees in this country are protected by the FLSA. Even some employees whose job duties remove FLSA protection still may be covered under state wage and hour laws. Under the FLSA and Ohio law, you must be paid the state minimum wage for all hours worked and must receive overtime pay at a rate 1.5 times your regular rate of pay for all hours worked over 40 in a work week.
Certain employees are exempt from the federal and state overtime pay requirements, meaning that those employees are not entitled to time-and-a-half for hours worked over 40 in a workweek. However, for your employer to properly classify you as exempt and not pay you that additional amount for overtime hours, your job duties must meet certain strict requirements.
One of the most common ways for your employer to classify you as exempt under FLSA rules is when you qualify under one of its“white collar exemptions.” Under these exemptions, you must pass two tests with regard to:
- Your Job Duties; and
- Your Salary
If your job/and pay don’t meet both requirements – described in detail below – you are entitled to overtime pay.
The Salary Basis Test
In order to pass the salary basis test you must meet the following requirements:
- Be paid on a salary basis – this means that you are paid a predetermined amount of compensation (weekly, biweekly, monthly), which cannot be reduced based on the quality or quantity of the work you perform.
- Be paid a minimum salary of $455/week or $23,660/year.
If your employer has classified you as exempt from overtime pay under a white collar exemption, but you are not being paid a minimum salary of $455/week, there is good chance that you have been misclassified. If so, you may be entitled to a substantial amount of unpaid overtime as well as liquidated damages going back as far as 3 years.
Employers are permitted to dock salaried employees pay and still hold them exempt in limited situations, which are:
- Absence from work for one or more full days for personal reasons other than sickness or disability;
- Absences of one or more full days due to sickness or disability if the deduction is made in accordance with a bona fide plan, policy or practice of providing compensation for salary lost due to illness;
- Offsetting amounts employees receive as jury or witness fees, or for military pay; for penalties imposed in good faith for infractions of safety rules of major significance;
- For unpaid disciplinary suspensions of one or more full days imposed in good faith for workplace conduct rule infractions;
- The initial or terminal week of employment; and finally
- For weeks in which an exempt employee takes unpaid leave under the Family and Medical Leave Act.
If an employer docks employee salaries for any other reason, affected employees must be paid overtime.
One of the biggest misconceptions regarding FLSA overtime exemptions that often leads to employees being shorted overtime pay owed is the mistaken assumption that, if an employee is being paid a salary, they are automatically exempt and not entitled to overtime pay.
Contact Tittle & Perlmuter: Ohio Overtime Lawyers
If you believe that you have been misclassified or if you have any questions regarding your employment status, feel free to call Tittle & Perlmuter at 216-285-9991, or contact us online to arrange a free consultation.
Misclassification as “Independent Contractors” Results in Owed Overtime Wages
One of the most frequent questions that employment lawyers receive is whether an employee is treated as an independent contractor is misclassified by the employer.
Often an employer may be interested in hiring or working with a person, but does not want to put them on the payroll. This could be because the relationship with the worker is anticipated to be short-term or only for a particular project. Or it may be because the scope of what the worker is supposed to do is very limited.
However, whether the company you work for classifies you as an employee or independent contractor matters, and in more ways than one. If you believe that you have been misclassified as an independent contractor, or have questions about this issue, call Tittle & Perlmuter at 216-285-9991 to arrange an initial consultation.
Why It Matters Whether You Are Classified as an Independent Contractor or Employee
It is very important that the businesses or employer you work for classifies you correctly, either as an employee or independent contractor, since there are tax, liability, and wage issues associated with the decision.
Firstly, the IRS requires business owners to withhold income taxes, withhold and pay Social Security and Medicare taxes, and pay unemployment taxes on behalf of employees.
No such payments or withholdings are required on behalf of workers that the business classifies as independent contractors. Rather independent contractors or their employers are required to pay these taxes.
In addition, a company is usually liable for the actions of its employees, but are not liable for the actions of an independent contractor, unless the company specifically authorizes or directs the contractor’s actions.
Similarly, a company’s workers’ compensation insurance only covers workers who are classified as its employees. Independent contractors are not entitled to workers’ compensation benefits, but must purchase workers’ compensation insurance for themselves and anyone else they bring on to the job.
Finally, independent contractors are not entitled to overtime pay. Thus, if you are an employee who has been misclassified as an independent contractor, you may be entitled to a substantial amount of back pay and liquidated damages for unpaid overtime going back as far as 3 years.
How to Know if You Should be Classified as Independent Contractor or an Employee
There are several factors used to determine whether a worker should be classified as an employee or independent contractor, however, the most important factor is control. If the company you work for controls or has the right to control the job you perform and how you do it, it is a good indication that you should be classified as an employee.
Other factors include:
- Who sets your work hours
- Who furnishes your tools and work materials
- The ability to work for other employers at the same time
- Who decides your pay rate and when you will be paid
If you are treated as an independent contractor, but the company you are working for makes these decisions for you, you may be an employee who is misclassified as an independent contractor.
Contact Tittle & Perlmuter: Ohio Overtime Lawyers
If you believe that you have been misclassified by your employer, or have questions about this issue, we encourage you to consult with us. Call Tittle & Perlmuter at 216-285-9991, or contact us online to arrange an initial consultation.
The Executive Exemption Gone Wrong – Managers Misclassified as Exempt or Non-Qualifying for Overtime
There are two big misconceptions regarding whether or not a manager is entitled to receive overtime pay:
- All white-collar employees are exempt from being paid overtime; and
- All salaried managers are exempt from being paid overtime
These misconceptions have led employers to misclassify many non-qualifying managers as exempt.
When is a Manager Exempt From Overtime Pay?
The most important thing to understand regarding whether or not a manager is exempt from being paid overtime is that a job title does not determine whether an employee is exempt or not. Additionally, neither being paid a salary nor a manager’s job duties alone will exempt them from overtime. In order for an exemption to apply both the manager’s salary and his or her specific job duties must meet the requirements for exemption.
There are a number of ways a manager can qualify as exempt under FLSA rules. Most exempt managers qualify under what is called the “executive exemption”. Under this exemption, a manager may qualify as exempt if their position meets the following conditions:
- Involvement in the management of the enterprise or one of its divisions or departments;
- Regularly and customarily directs the work of two or more full-time employees or the equivalent in manpower hours; and
- Having some influence over who gets hired, fired, promoted or demoted.
- A predetermined salary of $455/week or $23,660/year that does not depend on the quality or quantity of the work performed.
Not all managers meet these requirements and some qualify for an exemption based on other criteria.
It’s important to remember that a manager’s job duties, not his or title, largely determines whether or not he or she is entitled to receive overtime pay. That being said, here are few common examples of non-qualifying managers:
- Those who are paid on an hourly basis, or who are not paid a fixed salary of at least $455/week.
- Managers who do not supervise the work of at least two or more full-time employees or the equivalent in manpower hours.
- Employees who supervise other employees, but primarily perform non-managerial work themselves. For example, a store manager who spends most of the time stocking the shelves or working the cash register.
- Managers who have the words “manager or supervisor” in their title, but do not regularly and customarily manage or supervise others. For example, an “assistant manager” who primarily performs non-exempt job duties and who is only occasionally responsible for managing the work of other non-exempt workers when the manager is not available.
Why It Matters if a Manager Doesn’t Qualify for an Exemption
If you are a non-exempt manager, but have been misclassified as exempt, your employer may be in violation of both state and federal overtime regulations. What’s more, if you have worked any hours in excess of 40 hours in any given work week, you may be entitled to file a lawsuit against your employer to recover unpaid overtime for the previous three years, as well as, liquidated damages and attorney’s fees.
Contact Tittle & Perlmuter for a Free Case Evaluation Today
State and federal overtime laws can be complex and it is not always easy to determine if a manager qualifies to be exempt from overtime pay. If you suspect that you have been misclassified as exempt, an experienced overtime lawyer can help you sort through the criteria and assist you in recovering the back pay you are rightfully owed. To consult with an experienced Ohio overtime lawyer, call Tittle & Perlmuter at (216) 285-9991, or visit our contact page here.
Managers Supervising Less Than Two Workers that are Misclassified as Exempt for Overtime Wages
The federal Fair Labor Standards Act (FLSA) provides employees with the right to be paid the statutory minimum wage and overtime pay at a rate of time and a half their regular rate of pay for all hours worked in excess of 40 in any given work week. However, some employees are exempt from the FLSA overtime requirement.
Executive Exemption for Managers
To understand what an exempt manager is you must first understand that just because you have the title of manager, does not mean that you are automatically exempt under federal or state wage and hour laws. Rather, the actual job duties that you perform will correctly determine your employment status as an exempt manager.
Most managers who qualify for an exemption under the FLSA rules, do so under what is called an “executive exemption”. This exemption is for managers, bosses, supervisors, or people in charge of others.
For a manager to qualify for an executive exemption, they must pass both:
- The salary basis test
- Be paid a fixed salary
- Be paid a salary at or above the current minimum of $455/week or $23,660/year
- The job duties test
- Their primary duties must involve management of the enterprise in which he or she is employed or a recognized subdivision. This can be the management of a branch or subdivision of the company or of a particular department within that branch or subdivision.
- Supervise two or more other employees or the equivalent
What is sometimes overlooked is the fact that along with satisfying the salary requirements and performing managerial duties as described above, a manager must also customarily and regularly direct the work of two or more other full-time employees or the equivalent.
So, for example, if you are in charge of department “B” of your company, but you only have one direct employee, you cannot be classified as exempt under an executive exemption because you have to supervise the work of two or more full-time employees or the equivalent.
What is meant by “direct the work”?
This basically means directing, supervising and having the authority and direct control over the employee, including allocating work assignments, taking disciplinary actions, doing performance reviews, etc. But, it also means that you have some influence over who works for you i.e. the hiring and firing of employees.
What is meant by “equivalent”?
Two full-time employees equate to 80 manpower hours. So, an equivalent might be, for example, supervising one full-time employee and 2 half-time employees. What’s more, these manpower hours may be shared amongst two or more managers. However, each manager must customarily and regularly direct the work of 80 manpower hours, the equivalent of two or more full-time employees.
Thus, for a department to have two exempt managers who employees report to, they together must directly manage the work of at least 4 employees, each customarily and regularly supervising the work of at least 2 of these employees or the equivalent in manpower hours.
Contact an Experienced Ohio Overtime Lawyer
Some employers intentionally misclassify non-exempt managers as exempt to avoid paying them overtime. Classifying a manager as exempt can save the businesses money and increase profits. But, it also cheats the manager out of the right to be paid overtime for hours worked in excess of 40 in a work week.
If you think that you may have been misclassified, or have any other questions about being misclassified as an exempt manager, contact Tittle & Perlmuter at 216-285-9991, or leave us a message online to arrange a free consultation.
Professional Exempt Misclassifications Preventing Overtime Pay
State and federal laws that govern overtime pay are complex and many employers incorrectly classify salaried employees as overtime-exempt when they are actually eligible to receive overtime pay. Under the Fair Labor Standards Act (FLSA), employers must pay their employees time and a half for any hours worked beyond the 40-hour workweek, unless the employee meets the requirements to be classified as exempt from being paid overtime.
The Professional Exemption
The most common overtime exempt workers are those considered “white collar workers”––managers, administrators, and professionals. To qualify for the professional exemption, the nature of your job must meet the following salary and duties requirements:
- Salary: You must be paid at least the minimum salary amount set by the Department of Labor (DOL). That minimum salary is now $455 weekly or $23,660 annually.
- Duties: Also according to the DOL, your primary duties must consist of work requiring advanced knowledge in a field of science or learning, usually gained through prolonged instruction and study, that is mainly intellectual and involves the use of judgment and discretion, such as:
- Actuarial science;
Similarly, your primary duties may involve work requiring invention, originality, imagination, or talent. This applies to those employed as:
- Some types of painters; and
- Other creative professionals
One thing to understand about the professional exemption is just because you have the education, professional designation, or talent does not automatically mean that you are exempt. You must actually perform job duties that utilize that professional or intellectual knowledge, specialized training, and/or creative talent.
So, if you are a Ph.D, a physician, or an artist, but you primarily perform manual labor, you will not qualify for this exemption because your job duties do not require you to use the knowledge, specialized training, or creative talent of a professional.
Thus, title, education, and talent are not enough. Instead, what you do every day in the performance of your job is essential to qualify you for a professional exemption.
Misclassified as Professional Exempt? Contact an Experienced Ohio Overtime Lawyer
Whether you are a learned or creative professional, being misclassified as an exempt employee when you are in fact nonexempt may be costing you a lot in terms of unpaid overtime.
If you have worked any hours in excess of the standard 40-hour workweek in Ohio and were not paid overtime, you may be entitled to file a claim against your employer to recover back pay, liquidated damages, and your legal fees.
An experienced overtime lawyer can evaluate your case and assist you in recovering the pay you are rightfully owed. If you believe that you have been misclassified as an exempt professional in Ohio, contact Tittle & Perlmuter at (216) 285-9991 or visit our contact page to arrange an appointment to speak with a knowledgeable Ohio overtime attorney.
Administrative exemptions are often misunderstood by employers and misapplied to employees who, in actuality, do not pass the tests for overtime exemption. In order for an individual to be considered exempt under administrative guidelines, they must meet the following criteria:
- Earn a salary or fee basis of $455 or more a week.
- Have primary job duties that include office work that is directly related to running the business and impacts the employer’s company, or a client’s business.
- The employee has job duties that require making decisions using “discretion and independent judgement,” which affect the performance of the business.
If you are an administrative employee, but the work you do for the job does not include tasks that directly relate to business operations then you would not qualify under an administrative exemption. For instance, if your main job duty is to complete manual work, that would not meet the requirements for exemption.
Employees that typically qualify for this exemption include:
- Human Resources
- Public Relations
- IT or Tech Support
If you have questions about administrative exemptions and how that affects your pay, call a misclassification lawyer to determine if your employer is unfairly classifying you as exempt.
Employees may think that just because your job title includes the word “computer” or that you are part of the IT team in your company, that you are exempt from overtime. That is not always the case. In order for an employee to be considered as having a computer exemption, they must meet the following requirements:
- The employee must earn a salary of $455 or more a week, or earn $27.63 or more on an hourly basis.
- They are employed as a computer systems analyst, programmer, software engineer, or in another position that requires the same skill set.
- The primary duties of their job include systems analysis, consulting with users, or designing and developing computer systems or programs.
If you believe that your employer is misclassifying you as a computer exempt employee, contact a wage and hour lawyer to discuss your legal options.
Unlawful Use of Fluctuating Workweek (Salary Basis Test Failure)
Under the Fair Labor Standards Act (FLSA), non-exempt employees in Ohio have rights concerning wages, fair compensation for a 40-hour workweek, and overtime pay for hours worked beyond that 40-hour workweek. Specifically, the FLSA requires that most non-exempt employees receive overtime compensation equal to one and a half their regular pay rate for any additional hours that employee works beyond the 40-hour workweek. In some situations, the FLSA allows employers to calculate a non-exempt employee’s overtime pay using the “fluctuating workweek” wage payment method (29 C.F.R. § 778.114). However, an employer may only use this method to calculate an employee’s overtime pay in certain circumstances.
One of the ways in which the use of the fluctuating workweek method of payment is unlawful is when there is a “salary basis test” failure.
When An Employee in Ohio Can Be Paid According to the Fluctuating Workweek Method
Under the FLSA (29 C.F.R. § 778.114), an employee may be paid a fixed salary for fluctuating hours worked as long as the salary is large enough to ensure that no week will be worked in which the employee’s average wage falls beneath the minimum hourly rate set forth in the FLSA. In addition, the statute clarifies that an employee who is paid according to the fluctuating workweek method must understand that the salary pays for whatever hours the job may require in a certain week. Additionally, the employer must pay the wage even during weeks where the employee worked less than 40 hours.
Moreover, the statute requires an additional 50 percent to be paid for overtime hours worked. However, employers may try to avoid this payment by paying employee’s owed overtime wages in the form of bonuses, which is unlawful.
Understanding the Salary Basis Test Failure
For example, in Sisson v. Radioshack (2011), the U.S. Department of Labor clarified that, when an employee is paid according to the fluctuating workweek method, overtime hours worked cannot be compensated through bonuses or other non-overtime forms of compensation. For instance, when an employee receives a “base salary” as part of the fluctuating workweek method, overtime hours worked cannot be compensated with quarterly or year-end bonuses.
Overtime pay must be compensated as part of a fixed weekly salary. Failing to do so represents a salary basis test failure that is an unlawful use of the fluctuating workweek method.
Seek Advice from an Ohio Unpaid Wages Lawyer
Employers Must Pay Overtime on Certain “Per Diem” Payments
Under the federal Fair Labor Standards Act (FLSA) employers are required to pay their nonexempt employees overtime at a rate of 1.5 times their regular rate of pay for any hours they work above 40 in a workweek. The FLSA defines an employee’s “regular rate of pay” broadly to include not only the employee’s straight time pay, but virtually any payment received by the employee for his or her employment, except certain specifically identified payments such as gifts, contributions to profit sharing plans, discretionary bonuses, capital gains on stock options, etc.
What is a “Per Diem” Payment?
Some employees receive per diem payments along with their straight time pay. A pier diem would be something such as a $100 stipend for each day spent out of town, or $50 to cover incidental expenses for each day worked. According to the United States Department of Labor (DOL), unless these per diem payments are reasonably equivalent to the actual expenses incurred by the employee on their employer’s behalf and for their employer’s benefit (such as the cost of the employee’s airfare, lodging, travel, fuel etc.), they must be included when calculating the employee’s regular rate of pay for overtime purposes.
So what does this actually mean? To use the example above, if your employer automatically pays you $100 for each day traveled, but you do not regularly incur something in the neighborhood of $100 per day in work-related expenses on travel days, that $100 payment must be included as part of your regular rate of pay for the purpose of calculating any overtime you may be owed.
How Unlawfully Excluded Per Diem Payments Affect You
If your employer unlawfully excludes the per diem they pay you when they calculate your regular rate of pay, you rate of overtime pay will be artificially low and you will be underpaid.
A Look at the Difference Between Overtime Pay with and without Per Diem Payments Included in the Regular Rate
If you are paid $15/hour and receive a daily per diem of $50 when working out of town (a total of $250 for a five-day workweek) and you regularly work 50 hours/week, here is how much overtime you would be owed if your employer is permitted to exclude the per diem payment:
Your Regular Rate of Pay: $15/hour
Regular Rate Multiplied by Straight Time for all Hours Worked: $15/hour x 50 hours = $750
Your Overtime Pay for Hours over 40: ($15 x. 5) x 10 hours overtime = $75
Total Pay Including $250 Per Diem = $1,075
But, if your per diem is not reasonably tied to actual expenses incurred for the employer, it must be included in your regular rate of pay. Adding that $250 to your regular rate results in a significant difference in your regular rate of pay and the resulting amount of overtime you are owed for the week:
Total Straight-Time Pay: ($15/hour x 50 hours) + ($250) = $1000
Regular Rate of Pay: $1000/ 50 hours = $20/hour
Overtime Pay: ($20 x. 5) x 10 hours overtime worked = $100
Total Pay Including $250 Per Diem = $1,100
The per diem payment increased your regular rate of pay by more than 33%. Now, instead of owing you $75 for overtime, your employer owes $100––a $25 difference. This essentially means that if your employer unlawfully excluded your per diem payments every week for a year, you would be entitled to file a claim against your employer to recover $1,300 in back pay and an additional $1,300 in liquidated damages for a total of $2,600, plus your attorney’s fees.
Call Tittle & Perlmuter for a Free Case Evaluation
If you suspect that your overtime is being miscalculated by your employer, or to learn more about how excluding per diem payments from your regular rate of pay can lead to a miscalculation, consult with an experienced overtime attorney. In Ohio, contact Tittle & Perlmuter: Ohio Unpaid Wage and Overtime Attorneys at 216-285-9991 to arrange a free consultation, or leave us a message via our contact page.
Miscalculated Overtime Due to Bonuses or Commissions
Employers often shortchange their employees when calculating overtime for those who receive additional pay through commissions and bonuses.
The federal Fair Labor Standards Act (FLSA) says that employers must pay overtime to all nonexempt employees after they have worked 40 hours in a given seven-day workweek. The FLSA also says that overtime must be paid at a rate of 1.5 times their regular rate of pay. This means that a premium of .5 times an employee’s regular hourly rate of pay must be paid for all hours worked over 40 in a workweek.
Calculating Overtime with Extra Pay
If your only pay is a basic hourly rate – meaning that you do not receive any other type of compensation – it’s very easy to calculate your overtime owed for hours worked over 40 in a workweek.
For example, if you are paid $10/hour and worked 50 hours this week, your straight time pay would be $500 ($10 x 50 hours) and your overtime would be $50 ($10 x $.5 x 10 overtime hours worked). So, your total paycheck should be $550.
However, if you receive “extra pay” on top of your hourly rate, such as bonuses and commissions, calculating overtime can be more complicated and often leads to miscalculation of employee overtime pay.
Types of Additional Pay
Under the FLSA and Ohio law, any extra compensation paid to you or on your behalf must be included in your regular rate of pay for overtime purposes (for all nonexempt employees). Such extra compensation includes:
- Shift differentials
- Hazard pay
- Location pay
- Production bonuses
- Driving bonuses
- Attendance bonuses
- Sales bonuses
- Safety bonuses
- Performance bonuses
If you receive any of these types of extra compensation, you’re probably wondering, “How is my regular rate of pay is calculated?” The answer is: it can be complicated. Your overtime rate is one-and-a-half times that regular rate of pay. If the rate from which your employer is calculating your overtime pay looks suspicious, the best thing to do is to call an attorney knowledge in unpaid wage claims.
The only exceptions to this rule (that extra pay increases your regular rate) exist where the extra pay falls under one of the following eight categories:
- Gifts (other than cash)
- Pay for vacation, holidays, or sick leave
- Reimbursed expenses
- Discretionary bonuses (unexpected bonuses)
- Profit sharing plans (must meet FLSA requirements)
- Third-party contributions (employer’s contributions to your 401k, health or life insurance plan)
- Extra pay per company standards
- Certain types of stock options (must meet FLSA requirements)
These types of extra compensation are not included in the regular rate of pay for calculating the overtime rate.
Calculating Your Overtime Pay with Commissions and Bonuses
What does all of this mean in practice? For instance, you’re paid $17 as your hourly rate of pay and worked 62 hours in a particular workweek. You were paid $750 in commissions (or bonuses, etc.) for that week. Your regular rate of pay and the amount of overtime you would be owed is calculated as follows:
$1,054 + $750 = $1,804 (total compensation for the week)
$1,804/62 hours = $29.10/hour (that is your regular rate of pay for that workweek)
$29.10 x .5 x 22 hrs of overtime worked = $320.10 (overtime pay owed)
If your commissions had not been added to your regular rate of pay, the overtime owed to you would only be $187 ($17 x .5 x 22). That’s $133.10 less than what you should actually be owed – for just that one week.
As you can see, if an employer omits bonuses and commissions from your overtime calculations week after week, their employee can be shorted a very significant amount of overtime pay.
Contact Tittle & Perlmuter: Ohio Unpaid Wage and Overtime Lawyers
If you suspect that the amount of overtime you are owed is miscalculated and that you are not fairly compensated for the hours you work, contact Tittle & Perlmuter – Cleveland, Ohio Attorneys. We provide a free consultation and can help you better understand your legal rights. Call us now at 216-285-9991, or contact us online to schedule your free consultation.