OVERTIME LAW
The federal overtime law, known as the Fair Labor Standards Act, states that employers must pay non-exempt workers time-and-a-half compensation for hours worked in excess of 40 during a single workweek. Because overtime law is complex, many employers unintentionally fail to pay eligible workers 1.5 times their regular rate for overtime hours. However, when an employer understands the provisions of overtime law and intentionally avoids paying overtime compensation, an overtime scam may be taking place. While the list of overtime scams is endless, employees should familiarize themselves with the most common methods employers use to avoid paying overtime to ensure they are not falling victim to an overtime scam.
The most common overtime scam, working "off the clock" occurs when an employee is required to work without being clocked in. An employer may attempt to justify this overtime scam by telling an employee that he or she must stay behind after clocking out to finish work that should have been completed during the workday. However, for purposes of calculating overtime, all hours spent performing work for the employer must be counted as hours worked, regardless of whether the employee is clocked in.
Employee misclassification is another overtime scam employers use to avoid paying overtime. In this overtime scam, the employer intentionally files a worker as a non-exempt employee. (Non-exempt employees are not eligible to collect overtime compensation.) For instance, the employer may classify a retail cashier as a manager, but does not allow the employee to perform any managerial duties. If the worker is a non-exempt employee, they should receive time-and-a-half compensation as overtime eligibility is based on job duties, not job titles. Employees who are classified as independent contractors should also be on alert for signs of employee misclassification. Employers may misclassify regular workers as independent contractors because self-employed workers are rarely eligible for overtime pay.
If an employee offers a private sector employee compensatory time instead of overtime pay, an overtime scam may be occurring. Only public sector employees such as government workers or policemen can receive comp time in lieu of overtime pay. An employer can only offer comp time to private sector employees if the time is taken in the same pay period in which the overtime was worked.
Other common overtime scams include short-changing hours (not counting breaks lasting less than 20 minutes as hours worked) and paying straight time instead of time-and-a-half compensation for overtime hours.
By: Liz Ryan
Liz Ryan is a writing and content specialist for IQovertime. Visit IQovertime today to learn more about overtime scams and the basics of overtime law.
When is overtime due? For covered, nonexempt employees, the FLSA requires overtime pay at a rate of not less than one and one-half times an employee's regular rate of pay after 40 hours of work in a workweek. Some exceptions to the 40 hours per week standard apply under special circumstances to police officers and fire fighters employed by public agencies and to employees of hospitals and nursing homes. Some states have also enacted overtime laws. Where an employee is subject to both the state and Federal overtime laws, the employee is entitled to overtime according to the higher standard (i.e., the standard that will provide the higher rate of pay). How many hours per day or per week can an employee work? The FLSA does not limit the number of hours per day or per week that employees aged 16 years and older can be required to work. How many hours is full-time employment? How many hours is part-time employment? The FLSA does not define full-time employment or part-time employment. This is a matter generally to be determined by the employer. Whether an employee is considered full-time or part-time does not change the application of the FLSA. When can an employee's scheduled hours of work be changed? The FLSA has no provisions regarding the scheduling of employees, with the exception of certain child labor provisions. Therefore, an employer may change an employee's work hours without giving prior notice or obtaining the employee's consent (unless otherwise subject to a prior agreement between the employer and employee or the employee's representative). When is double time due? The FLSA has no requirement for double time pay. This is a matter of agreement between an employer and employee (or the employee's representative). Is extra pay required for weekend or night work? Extra pay for working weekends or nights is a matter of agreement between the employer and the employee (or the employee's representative). The FLSA does not require extra pay for weekend or night work. However, the FLSA does require that covered, nonexempt workers be paid not less than time and one-half the employee's regular rate for time worked over 40 hours in a workweek.
