Employers Still Violating Overtime Wage Laws – 74 Years and Counting

June 28, 2012  |  Employment Law, Overtime Violations

Even though the Fair Labor Standards Act (“FLSA”) was passed in 1938, violations of this law that require the payment of overtime wages, in addition to other protections for workers, continues to be violated 74 years later by employers looking to enrich executives at the expense of its workforce.

A prime example of companies not complying with FLSA standards comes from a recent lawsuit filed against the Los Angeles Hilton. Some 1,200 employees filed a class action lawsuit against the hotel, alleging the company withheld wages and failed to pay overtime from 2004 to 2011. Although the hotel fought the lawsuit, hotel employees successfully recovered $2.5 million in FLSA-related wage and hour damages.

Chief employee complaints have centered on being deprived of proper overtime pay through various employer tactics—like telling workers they are not due overtime since they are paid a “salary,” allowing or requiring employees to work “off-the-clock” or misclassifying nonexempt jobs as exempt from overtime laws.

So who is covered by the FLSA?

A non-exempt employee is covered by the FLSA’s minimum wage and overtime allowances.

First of all, almost every employee who is paid hourly as opposed to salary is due overtime. The general exceptions are for lawyers and doctors.

Second, employees who are paid a salary of at least $455 per week are still due overtime compensation unless they qualify for one of several so-called “white-collar” exemptions. Examples of the exemptions where no overtime pay is due include: (1) executives who are in management, manage two or more employees and have the authority to hire and fire or make significant recommendations on hiring and firing; (2) professionals with advanced degrees or certifications, such as CPA’s, engineers or registered nurses; or (3) outside sales employees (i.e. sales people who go door to door or to customer’s locations to make sales).

According to the Department of Labor, most nonexempt workers must be paid federal minimum wage and overtime wages at a rate of not less than one and one-half times their regular rates of pay, after 40 hours of work in a workweek. The penalty for employers caught withholding overtime pay is paying the employee double the amount of overtime wages due.  In other words, if an employee is owed $5,000 in unpaid overtime, that amount generally automatically becomes $10,000 due to the FLSA’s “liquidated damages” provision.

Although the FLSA was passed 74 years ago, thousands of employers continue to misclassify “nonexempt” workers as “exempt.” For example, you may be told that because of your position’s authority (though limited) overtime wage laws don’t apply to you; or that because you are a skilled computer technician you are not due overtime; or because you are an assistant manager (with limited authority) you are exempt from the overtime wage laws; or because you are allegedly an “independent contractor” you are not due overtime pay.  You should know, however, that the FLSA cannot be circumvented by employers with artificial labels. The FLSA, despite being 74 years old, continues to protect modern workers from being cheated out of compensation they have earned and should be paid.

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