In 2016, it was announced that President Obama wants to raise the threshold for payment of overtime pay from $23,660 per year to $47,476. The president would also like to change some rules regarding different classifications of employees to prevent employers from getting free overtime out of hard working Americans.
All of this talk about overtime pay in recent months has put the penalties for not paying overtime back in the spotlight. For now, the limit of $23,660 per year still stands, which means anyone making over that limit does not automatically qualify for overtime if they work more than 40 hours a week. It also means that government officials are watching companies to make sure that overtime is being paid and that employer fraud is not being committed, but what does that really mean?
Getting To Grips With The Fair Labor Standards Act (FLSA)
WageAdvocates.com sates the importance of knowing your rights under The Fair Labor Standards Act (FLSA). The FLSA is the piece of legislation the federal government tries to use to prevent the average worker from getting cheated out of overtime pays. There are a series of labor laws in place that dictate how certain workers are to be paid in certain working conditions, but the FLSA applies to any employee working in any industry.
The FLSA does its best to lay down guidelines for as many labor situations as possible, but employers usually find ways to get around the labor laws and create adverse working conditions. Now that the spotlight has been put back on overtime laws, it is important that every working American understand what overtime is, and know when they should get paid for it.
Common Employer Fraud Situations
Some may feel it is extreme to refer to overtime pay issues as employer fraud, but that is exactly what it is. There are common situations employers use to try and deny employees the overtime pay they are entitled to. Those situations are:
- Classifying employees incorrectly as managers or supervisors
- Asking employees to work hours that are not cataloged (such as travel time and waiting time that is part of an employee’s job function)
- Requiring independent contractors to act as employees without employee pay benefits such as overtime
When an employee is given the responsibilities and even title of a supervisor but is still asked to do their regular job tasks, then that is taking advantage of an employee. When it forces that employee to work more than 40 hours a week, it is illegal. The shift to a management title is usually accompanied by a salaried pay structure, which is what the employer’s abuse.
Is the time you spend traveling from one jobsite to the next considered hours worked? In some instances, it can be and it should be paid as overtime. The same goes for employees who spend hours a week waiting for customers or members of management without getting paid.
Sometimes an employer will tell a new worker that they will be classified as an independent contractor. This is done by the employer to avoid having to pay benefits and overtime. But if the worker uses tools supplied by the company and is supervised in their regular tasks by the company, then they are an employee and entitled to overtime.
What Are The Penalties?
Employees who have been denied overtime pay and can offer documentation to prove it can sue for back pay and, in many cases, will win. With the spotlight shining on overtime pay issues right now, the federal government has been initiating lawsuits to force employers to pay back wages. Employers who violate labor laws with regards to overtime pay could face fines that range from $10,000, up to $1,100 per incident. Many of the cases prosecuted by the federal government have also resulted in jail time for the offending employer.
Employees who feel that they are being cheated out of overtime pay should record the hours they work and file a complaint with the Department of Labor. Now that the rules regarding overtime pay have been changed, more workers are going to be entitled to the pay they work so hard to generate.
Tim Becker Bio:
Tim Becker is a partner at Minneapolis’ Johnson // Becker PLLC and is the lead sponsor of WageAdvocates.com. He has over 20 years of trial experience and has proven himself to be a tireless advocate for worker rights. Becker is committed to providing his clients effective and aggressive legal representation.
