One of the most common wage and hour issues which confronts both employers and employees is unpaid overtime compensation claims. The Fair Labor Standard Act (“FLSA”) mandates that “non-exempt” employees entitled to overtime pay receive 1½ times their regular rate of pay for each hour worked over 40 hours per week. This is true even if an employer maintains a “no overtime” policy.
One of the most common issues in unpaid overtime wages cases is an effort by an employer to classify an employee as either “exempt” or an “independent contractor,” both of which have the practical effect of avoiding overtime wages.
But classification is not an easy task. Rather, there are complex rules and regulations which govern an accurate classification as to whether an employee is, in fact, “exempt” or an “independent contractor” and, therefore, not entitled to overtime compensation, and that determination is premised upon the actual job duties and responsibilities of employment, not necessarily the way an employer characterizes the same (such as providing the employee with a certain job title (i.e. manager) or paying an employee on an annual salary basis. For example, an employee may be entitled to overtime compensation even if he or she is paid on a salary basis and is provided with a job title which seems to imply that the employee is exempt from overtime.
Some employers refuse to pay overtime; others pay so-called “straight time” in cash instead of 1½ times the regular rate of pay for all hours worked over 40 hours per week; yet others tell workers to only clock 40 hours per week and not to clock any hours after 40 hours. These policies may subject the employer to significant personal liability for unpaid overtime wages.
In addition to recovering unpaid wages for up to three years pursuant to the Fair Labor Standards Act, an employer may also be liable for liquidated damages and the employee’s attorney’s fees related to a lawsuit seeking to recover unpaid overtime wages.
If you are an employer who has been accused of failing to pay overtime, or an employee who believes that you have not received fair overtime pay, please call us for a free evaluation.
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