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When working for an employer, most people expect that they will be paid an agreed-upon amount for working a set number of hours. Fortunately, in the majority of employer-employee relationships, this is exactly how it works. However, in some situations—and likely more often than you realize—some employers hold back money that is rightfully owed to the employees and, in turn, risk significant legal exposure. In most cases, it isn’t as obvious as simply not paying the employee, but instead, employers sometimes have policies or practices in place that run afoul of various wage and hour laws. The following five examples are among the most common ways that employers run afoul of various wage and hour laws.
Misclassifying Employees
There are many ways that employers can classify their employees, and each of them will have an impact on their pay. For example, an employer may classify an employee as exempt, which would result in that employee not getting overtime pay. They could also list an employee as an independent contractor, even though they do the same work as a normal employee. These, and other, types of misclassification can cost employees a considerable amount of money and give rise to significant legal exposure for the employer. While there are regulations in place that guide employers on how they should be classifying their employees, some employers simply fail to get legal counsel to guide them through those regulations.
Not Paying Overtime
As mentioned above, when an employer classifies their employees as exempt, they don’t have to pay overtime. If an employee is misclassified and not paid overtime, that employee could file suit against the company and, in certain circumstances, be entitled to, among other relief, treble damages and attorneys’ fees, if they are successful. With the recent Rule issued by the Department of Labor to expand overtime protections, which is set to go into effect on December 1, 2016, every business should re-examine positions that they previously classified as exempt. Another way employers run afoul of wage and hour laws is by ‘moving’ hours worked from one pay period to another so they only have to pay the normal rate for the hours worked. If your business is engaging in this practice, you should consult with legal counsel immediately.
Failing to Pay for Hours
Some employers ask employees to work, but then don’t pay for them. For example, requiring employees to do some types of work from home, but not counting those hours on the paycheck. Another way this is done is by requiring employees to arrive at work 15 minutes early, but refusing to pay for the work they do once they are there. These activities are illegal and employees can sue for back pay.
Paying Under Minimum Wage
Employers may, knowingly or unknowingly, pay their employees a rate below the established minimum wage. This is one of the more egregious ways that employers run afoul of labor laws. Indeed, this is one of the easiest cases for a plaintiff’s attorney to prosecute against the employer and to win. If you are an employer with multiple locations, you must keep up to date not only on the federal minimum wage laws but also on the local minimum wage laws so that you can avoid legal exposure for possible wage and hour claims.
Excessive Deductions
Some employers charge their employees for different things such as uniforms and other required items. An employer may not charge employees so much that their actual rate of pay drops below minimum wage. Even if it doesn’t drop that low, some types of deductions can be considered excessive in the court of law.
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If you are a business owner who has concerns about possible legal exposure for wage and hour claims, contact us for a consultation so that we can take steps immediately to assess and minimize your legal exposure. We’ll provide you with honest and direct advice and work tenaciously to protect your interests. Each service that is offered is backed by his experience, education, professional training, and passion for employment law, business law, and litigation.