WGSF Newswire: Unpaid Wages
UNPAID WAGES are a fairly common occurrence but most workers don’t know that they’ve been denied wages they are due. As many as 70% of employers fail to comply with wage and hour laws. A common example involves overtime hours worked for which the employee is not paid. Often the employer will refuse to pay those hours citing “policy” that overtime hours must be approved in advance. The worker may accept that as true and be resigned to the fact that they will never be paid for those hours. Has this every happened to you? Well that “policy” probably is not in accordance with the law.
There are a number of federal and state laws regulating wage payment to employees, both hourly and salaried, the federal Fair Labor Standards Act being the most widely applicable. The FLSA affects most private and public employment. It requires employers to pay covered employees at least the federal minimum wage and overtime pay for all hours worked over 40 in a work week. Covered employees must be paid for ALL hours worked in a workweek. In general, compensable hours worked include all time an employee is on duty or at a prescribed place of work and any time that an employee is “suffered or permitted” to work. This would generally include work performed before clocking in and after clocking out, work performed at home, training, probationary periods and certain travel and waiting time. Tipped employees may be paid a lower hourly rate but only if the employee’s tips combined with the hourly wage equals the federal minimum wage. If not, the employer must make up the difference.
Many wage problems begin with employers misclassifying employees as independent contractors or “management” under the mistaken belief that those workers are not entitled to overtime or other employment-related tax benefits. Employers have many incentives for misclassifying workers. Misclassified employees lose workplace protections, including the right to join a union; face an increased tax burden; receive no overtime pay; and may have no recourse for workplace injury violations and disability-related disputes. Misclassification also causes federal, state, and local governments to suffer revenue losses as employers circumvent their tax obligation.
There are many misconceptions about wage and hour laws that deter employees from receiving proper pay. Here are 4 common misconceptions:
1. Salaried workers cannot receive overtime pay. Many salaried employees do not receive the proper pay simply because they and their employers are under the false assumption that the worker is rendered ineligible for overtime pay simply because the worker is paid a salary versus hourly rate. This is one from of worker misclassification that leads to unpaid wages. In order to be “exempt” from the minimum wage and overtime pay rules of the FLSA, an employee must receive at least $455 each week in salary, regardless of the number of hours worked, and must perform a significant amount of supervisory or managerial duties.
2. If I work a flat rate, then I am exempt from overtime. Any “non-exempt” employee covered by the FLSA must be paid minimum wage and overtime regardless of any fixed pay arrangement. If the total of the flat rate payments divided by the number of hours worked in that week do not add up to the minimum wage having been paid, the employer must make up the difference.
3. If my employer issues me a 1099 at the end of the year, I am exempt from overtime. It is very common for employers to believe that they can avoid paying minimum wage, overtime and payroll taxes by simply electing to pay a worker with an 1099 IRS form. This is not true and is another common example of misclassification. Whether a worker is an independent contractor depends on a variety of factors including the extent of control the employer has over the manner in which the worker performs his or her duties, whether the worker is performing work for other employers concurrently and the contractual arrangement between the worker and the employer. In most situations, the employee should not be paid with a 1099.
4. If you earn tips, you are not eligible for overtime pay. Restaurant workers are frequent victims of inaccurate pay. Tipped employees are entitled to overtime in the same manner as other non-exempt employees. There are many misunderstandings by employees and employers on proper pay of tipped employees. Tip pools are frequently used by employers to improperly reduce their cost of ensuring that tipped employees receive minimum wage.
As a worker it is important to know your rights concerning your pay. You have 3 years from the date your wages were due to file an unpaid wage claim. You can review your wage payment history from prior employers and raise claims against them. Always be sure to keep track of the number of hours you perform work, whether on the clock or not, and double-check your paystubs to be sure you’re being paid for all of those hours. If you suspect that you are not receiving the correct pay, call us.
Michael Fiffik, Esquire and Matthew Bole, Esquire regularly consult with employees concerning unpaid wages. They can be reached at 412.391.1014 or at firstname.lastname@example.org or email@example.com.