With the ever-growing necessity of technology, a weak economy and a poor job market, employees have found themselves more accessible, working more hours and receiving less pay.
Due to this current trend, there has been a surge in Labor Law claims at the federal and state level with employees seeking wages earned for long hours worked for which they subsequently were denied payment by their employer.
In reviewing the lawsuits filed, many researchers are finding common reasons as to why employees were not compensated accordingly. They have found a trend among employers who are trying to cut their expenses while getting maximum productivity from their employees.
10 Reasons Why You’re Not Being Paid Overtime
Lack of Knowledge
Many employers do not do their due diligence in ensuring they are knowledgeable to changes made to the federal and state labor laws. Laws that were mandated three years ago might not hold true the following year.
Lawmakers are constantly reviewing existing laws and reconciling them to meet modern needs. However, not all employers stay-on-top of the changes made and continue to do business under assumed laws.
Some employers believe that making an employee salaried automatically makes that employee “exempt” from overtime compensation. However, that is not necessarily true. In order for a salaried employee to be considered “exempt” they must meet certain requirements outlined in the Fair Labor Standards Act.
Each employee must make at least $455.00 weekly, receive the same amount of money each pay period and must have a qualifying exempt job. An employer cannot merely make an employee salaried to avoid overtime compensation.
Phony Job Titles
Under the Fair Labor Standards Act, high-level management and executive employees are not entitled to overtime compensation.
However, middle and lower-level employers are to be compensated for their overtime. For this reason, many employees will create a phony job title such as Store Manager to give the perception of high-level management so the employee is not aware of their rights as an employee in regards to overtime compensation.
Working “Off The Clock”
Trying to increase productivity while cutting costs, employers have found ways to have their employees perform without compensatory pay, such as having them complete tasks or projects outside of their scheduled work hours.
As an example, there are employers who require that employees come to work early to begin the start-up processes of their day, such as turning on the computer and checking voicemails, without “clocking in”.
Employees are conforming to these demands out of fear of job loss, loss of income and inability to regain employment.
Employers have created the term “Comp Time” which creates an opportunity for them to request employees work overtime hours without receiving overtime compensation and allows the employee to arrange for future time off.
Regardless of time taken off of work, employees are still required to receive compensatory pay for overtime.
Technology has not only made it easier to work from home, but it has also made the employee more accessible to their employer.
Knowing the convenience of accessibility, employers are relying on the newest mobile technology to allow them to request work be completed outside of scheduled work hours. Smartphones are being used to communicate the need for task completion and many employees complete these tasks either from home or a separate location without their hours being recorded or compensated.
Employers have been hiring “Independent Contractors” to perform tasks without receiving benefits, including overtime compensation, and, in turn, drives down the employers expenses.
Over the past few years, this has been an increasing trend that has not gone unnoticed. Many businesses are beginning to crackdown on hiring contractors as federal and state agencies are beginning to penalize companies who have made a habit of this type of hiring.
Holiday and Weekend Work
There are employers who require work on certain holidays and weekends. Merely working a holiday or a weekend does not qualify an employee for overtime compensation.
However, if an employee exceeds their regular scheduled hours due to the hours worked on either a holiday or weekend, they are entitled to receive compensatory pay.
When it comes to reporting hours, there are employers who require advanced authorization for an employee to receive overtime compensation or who are aware their employees are working overtime, but turn a blind eye and do not report their accurate hours.
Small Businesses are Exempt
Operating under the assumption that a business is too small, there are employers who feel they are within their right not to provide compensatory pay to employees that work more than their scheduled forty hours.
However, the Fair Labor Standards Act focuses on interstate commerce. There is a very broad meaning attached this term and virtually any practice connected to our networked economy can be considered interstate commerce, such as selling products to out-of-state clients or purchasing from vendors which are located out-of-state.
Employers are finding new ways to avoid having to pay overtime compensation due to a struggling economy and an awareness of a poor job market. With this in mind, there is pressure put upon the employee to perform without receiving compensatory pay.
Despite the several ways in which employers have been able to avoid paying their employees earned overtime compensation, laws are continually being created and updated to protect the employee. To ensure proper pay is received, employees should know their rights as regulated by law.
If you work more than 40 hours a week and have been denied overtime pay, contact Wenzel Fenton Cabassa, P.A., today. We may be able to help you recover money that’s owed to you.
Please Note: At the time this article was written, the information contained within it was current based on the prevailing law at the time. Laws and precedents are subject to change, so this information may not be up to date. Always speak with a law firm regarding any legal situation to get the most current information available.