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COMMON
FLSA VIOLATIONS
What is the FLSA and what are some common violations employers make?
The Fair Labor Standards Act (“FLSA”) is a law that establishes a wide range of areas concerning employee rights and employer obligations. The FLSA prescribes minimum wage, overtime pay, record keeping requirements, and youth employment standards for employees in the private and public sectors.
The FLSA is meant to protect employee and worker rights but unfortunately FLSA violations by employers are all too common. When an employer violates standards under the FLSA, and when you are able to prove so in a court of law, then there are penalties the employer must pay to the employees impacted. Awards to the employee can be quite substantial.
Here are some common FLSA violations to be aware of:
Minimum Wage Violations
NO FINAL PAYCHECK IS DELIVERED
At a minimum, FLSA requires former employees to receive payment on the next scheduled payday. However, this can vary by state. State regulations generally require employers to issue final paychecks on an employee's last day or within a certain number of days after employment has terminated. If the employee's final paycheck has not been paid within the allowed time frame we can help you recover back wages.
UNAUTHORIZED PAYCHECK DEDUCTIONS ARE MADE THAT BRING THE EMPLOYEES' PAY BELOW THE MINIMUM WAGE
The FLSA's general rule regarding unauthorized paycheck deductions is that wage deductions for items/payments that are considered for the benefit of the employer may not reduce an employee's rate of pay to below the minimum wage.
NOT COMPENSATING EMPLOYEES FOR PAID FOR OFF-THE-CLOCK WORK
It is a violation of the FLSA if an employer is requiring an employee to perform work-related tasks on their behalf "off-the-clock" or outside of an individual's scheduled work time without getting paid for it. If your employer is asking you to perform tasks on their behalf and is not permitting you to record that time, then we may be able to help you recover back pay. This happens frequently to people who are working from home or working remote. Are you being paid for all of your emails, calls and texts?
Unpaid Business Expenses Violations
NOT PAYING YOU BACK FOR EXPENSES YOU PAID AS PART OF YOUR JOB
The FLSA prohibits an employer from shifting its operating expenses to employees. This happens frequently to people that have to drive as part of their job. Whether you are a delivery driver or you just have to drive as part of your job, the FLSA requires your employer to reimburse you for actual vehicle expenses such as gas and repairs or to reimburse you at the IRS rate of 62 cents per mile. This happens frequently to people that work from home or work remotely. If you are working from home, you are likely paying for the internet and phone service that you need to do your job, or maybe you had to pay for the computer, phone or other equipment. In many instances, the FLSA requires your employer to repay you for these expenses.
Independent Contractor and Exempt Employee Misclassification Violations
MISCLASSIFYING AN EMPLOYEE AS AN INDEPENDENT CONTRACTOR OR AS AN EXEMPT SALARIED EMPLOYEE TO AVOID PAYING OVERTIME
Under the FLSA, an employer cannot deliberately misclassify a worker as exempt, i.e. as an independent contractor, 1099 worker, or as a salaried employee, in order to avoid paying overtime wages. If you work over 40 hours a week and your employer dictates how and when you work or gives you an inflated title and a salary, your role may be misclassified and you may be due back pay on overtime wages.
NOT PAYING FOR OVERTIME
Unless you are an exempt employee, the FLSA details that employees must receive overtime pay for working over 40 hours in a workweek at a rate of at least time and one-half their regular rate of pay.
EXCLUDING EARNED COMMISSIONS FROM OVERTIME PAY CALCULATIONS
According to the FLSA commissions are payments for hours worked, even if they are calculated based on a percentage of total sales; therefore, any commission pay must be added into the regular pay rate when calculating overtime. The formula for calculating an employee's regular rate in a single workweek is REGULAR RATE = (WAGES + COMMISSION) / X HOURS WORKED. An employee's regular rate, which is inclusive of any earned commissions for the workweek, is what needs to be used when calculating overtime pay.
"BANKING" OR "HIDING" OVERTIME WORKED FROM ONE WEEK INTO ANOTHER WEEK TO AVOID PAYING OVERTIME WAGES
According to the FLSA, banking any hours over 40 worked in a week for non-exempt employees as flex time or paying them at the regular rate on future paychecks is not allowed. Employees are required to always be paid at least one-and-a-half times their regular rate for any hours worked over 40 in a workweek.
NOT PAYING OVERTIME UNTIL HOURS WORKED EXCEEDS 80 HOURS IN A 2-WEEK PERIOD INSTEAD OF 40 HOURS PER WORKWEEK
It is illegal under the FLSA for an employer to pay employees overtime only if they work in excess of 80 hours in a two-week pay period. Overtime for non-exempt employees must be calculated in excess of 40 hours per workweek.
REQUIRING EMPLOYEES TO WORK AT MULTIPLE LOCATIONS OF THE SAME BUSINESS TO AVOID PAYING OVERTIME
The FLSA stipulates that all of an employee’s time, including hours worked at different locations, must be included when determining overtime pay. It does not matter if an employee is performing different work with different pay rates, the hours must be combined for the purpose of calculating overtime pay.
Violations Against Restaurant Workers and Tipped Employees Rights
NOT PROVIDING "TIP CREDIT" NOTICE TO TIPPED EMPLOYEES
A tip credit allows employers to count an employee's tips to satisfy a portion of the minimum wage requirements. Employers are required by FLSA to inform their employees that they will be taking this "tip credit" to apply it towards minimum wage standards.
TIP POOLS THAT INCLUDE NON-TIPPED EMPLOYEES WHEN AN EMPLOYER IS TAKING A TIP CREDIT
When an employer is applying a tip credit towards the minimum wage requirements for tipped staff then any tip pools can only be distributed amongst tipped staff. When the tip credit is being applied then tip pools must exclude all non-tipped staff - i.e. management, the house, cooks, dishwashers, kitchen staff, etc.
MISCALCULATING OVERTIME RATES FOR TIPPED EMPLOYEES WHEN AN TAKING A TIP CREDIT
If an employer is claiming a tip credit and a tipped employee works more than 40 hours in a workweek then the overtime rate of 1.5x their standard rate needs to be calculated off the the national or state minimum wage requirements (whichever is higher). Often times, employers will incorrectly pay tipped employees based on 1.5x the tip credit (i.e. 1.5 x $2.13 = $3.19/hr) instead of 1.5x the full minimum wage minus the maximum allowable tip credit (i.e. [1.5 x $7.25] – $5.12 = $5.75/hr).
These are just some examples of overtime and minimum wage violations according to the Fair Labor Standards Act (“FLSA”). If you think that you may have been wronged by your employer, then contact us the team at Simon Law Co. for a free case consult.
You may be entitled to compensation. FSLA laws are in place to protect workers and if an employer has failed to pay you minimum wage and/or overtime pay then the law stipulates that your employer must pay you twice the amount of your underpaid wages in addition to fines in some cases, plus all of your attorney fees. At Simon Law Co. we will never ask you for money. We make your employer cover our fees.
