Wage Theft and Overtime Violations Attorneys

FLSA Payment Guidelines

The FLSA sets forth several guidelines to clarify what is “fair” compensation under federal law. Male and female employees who perform equal work on jobs the performance of which requires equal skill, effort, and responsibility, and which are performed under similar working conditions may not be paid discriminatory, unequal wages on the basis of sex. Other guidelines cover the minimum hourly wage for employees, the overtime pay for working over 40 hours per week, and the difference between exempt and nonexempt employees.

FLSA and the Federal Minimum Wage

The minimum wage for workers under the FLSA is $7.25 per hour; however, if you work in a state with a minimum wage higher than $7.25, you are entitled to your state’s minimum wage rate.

Employers in some states can pay less than minimum wage to employees who receive tips by crediting tips received against the minimum rate. Still, if your pay and tips do not add up to at least the minimum wage in your state, your employer is in violation of wage and hour laws.

Overtime Pay

The FLSA does not limit the number of hours an employee can work in a week (unless the employee is a minor). However, an employee who works more than 40 hours a week must be paid one-and-a-half times the regular rate of pay for every hour over 40 hours. In addition, many states have other overtime rules that benefit employees.

With the exception of state and local government agencies, it is illegal for an employer to provide an employee compensatory time off from work (or comp time) instead of paid overtime wages. Each workweek stands alone for purposes of determining the number of hours worked and amount of compensation due.

FLSA Exempt vs. Nonexempt Categories

A critical portion of the FLSA deals with which employees are “exempt” from the Act’s standards on overtime pay and minimum wage pay. Some business owners attempt to classify all workers with a particular job title (for example, “manager”) as exempt employees to avoid paying overtime pay. However, a job title is not determinative of whether an employee is exempt under the FLSA. Exemptions are specifically defined exceptions to the strong default protections of the law. The Department of Labor offers explicit guidance on who qualifies as an exempt employee under the law. Some common examples include:

• Executives: Salaried employees whose job is primarily managing an enterprise, department or subdivision; who have hiring and firing power; and who regularly directly supervise at least two full-time employees.
• Administrative employees: Salaried employees who perform office or other non-manual work directly related to the employer’s general business operations and who exercise discretion and independent judgment in the performance of their job.
• Learned professionals: Salaried employees who perform intellectual work in a field of science or learning, which requires the consistent exercise of judgment and discretion
• Certain salespeople who perform sales work outside of the office or other fixed location
• True independent contractors and volunteers for non-profit organizations

Wage Theft: Salary, Tips, Commissions, Bonuses, and Stock Grants

The FLSA offers detailed guidance on how to count tips, commissions, bonuses, and other forms of compensation in relation to calculating a worker’s “regular rate” of pay. This is significant, because employers may unlawfully choose to exclude these forms of compensation when calculating overtime, which is mandated to be provided at one-and-a-half times an employee’s regular rate of pay. If your employer is not paying you overtime based upon all your compensation, then it may be violating the law.

Falsifying Time Records

It is unlawful for employers to alter time records in an effort to pay employees for fewer hours than they actually worked. Such falsification, or time shaving, violates state laws requiring employees to be paid for all hours worked, as well as overtime laws when the employees are working over 40 hours a week.

Paying Less Than Minimum Wage

Employers are generally required to pay their employees no less than the federal minimum wage of $7.25 per hour, or $2.13 per hour for tipped employees. However, if you work in a state with a higher minimum wage than the federal rate, you are entitled to receive your state’s minimum wage. Employers who pay less than these mandated amounts are violating wage and hour laws.

Illegal Deductions from Employees’ Pay

Taking unauthorized deductions from employees’ wages is another common violation of wage and hour laws. These illegal deductions can include charges for uniforms, tools, or other business-related expenses that should be covered by the employer.

Requiring Employees to Foot Business Expenses

As noted above, some employers improperly require their employees to cover business expenses out of pocket. These expenses might include costs for uniforms, tools, travel, supplies, or equipment necessary for performing job duties.

Failing to Provide Meal and Rest Breaks

Many states require employers to provide employees with meal and rest breaks. One of the states with the strongest requirements, California, mandates that employers offer workers a 30-minute meal break for every five hours worked, and a 10-minute rest break for every four hours worked.

Not Issuing Accurate Pay Statements

Accurate pay statements are essential for transparency between employers and employees regarding wages earned, hours worked, and deductions made. Employers who fail to issue accurate pay statements run afoul of the laws in numerous states.

Reporting Pay

“Reporting pay” refers to the compensation that must be provided when an employee reports for a scheduled shift but is sent home early because of lack of work or other reasons beyond their control. These laws, written at the state level, are designed to protect workers’ income stability, and this field of law is still evolving. However, an employer’s failure to provide reporting pay when required constitutes a violation of labor regulations.

Retaliation for Reporting Wage/Overtime Violations

When employers punish employees for asserting their rights under wage and hour laws — such as complaining about unpaid wages or overtime violations — by demoting them, reducing their hours, terminating employment, or other adverse actions, it is considered retaliation. This is prohibited under both federal law (FLSA) and various state statutes aimed at protecting workers’ rights.

Failure to Maintain Accurate Time Records

Employers are legally obligated under the FLSA and many state laws to maintain accurate records of all hours worked by their employees. Failure to do so makes it difficult for employees to verify that they have been paid correctly for all hours worked – including overtime – and constitutes a serious breach of labor regulations.

Forcing Employees to Work Off the Clock

Having employees perform work duties off the clock – without recording their hours worked – is an illegal practice. This includes tasks performed before clocking in or after clocking out, such as setting up equipment or shutting down operations at the end of a shift.

Denying Overtime Pay

Under the FLSA and state laws, nonexempt employees must be paid one-and-a-half times their regular hourly rate for any hours worked over 40 in a single workweek. Some employers attempt to pay employees at their regular rate, or straight time, for their overtime hours. Other employers refuse to pay for work performed because the overtime hours were not “approved.” Still other employers misclassify employees as exempt under the law and refuse any excess pay for working over 40 hours in a week. Denying employees full overtime pay is a clear violation of federal law as well as many state-specific labor statutes designed to ensure fair compensation for extended working hours.

Inaccurate Calculation for Overtime Pay Owed

Inaccurate calculations of overtime pay owed can occur when employers misinterpret how overtime should be calculated – often resulting in underpayment. Proper calculation involves including commissions, non-discretionary bonuses, and other forms of compensation in determining an employee’s regular rate before applying the time-and-a-half multiplier required by law.

Averaging Work Hours Over More Than a Week

Some employers illegally average an employee’s work hours over multiple weeks instead of calculating overtime on a weekly basis as required by FLSA regulations. This practice dilutes actual overtime owed by spreading extra hours across several weeks rather than compensating appropriately within each individual week where more than 40 hours were worked.

Peterson v. ACS

In the case of Peterson v. Alaska Communications Systems Group, Inc. (ACS), filed on April 30, 2012, the firm represented Laura Lee Peterson and a class of ACS sales employees who were misclassified as exempt from overtime pay requirements under both the Alaska Wage and Hour Act (AWHA) and the Fair Labor Standards Act (FLSA).

The final approval of the settlement in 2022 marked a significant victory for the plaintiffs. This case reinforced the importance of proper employee classification and adherence to state and federal overtime regulations. The resolution provided substantial monetary relief to affected workers and emphasized that all corporations must comply with labor laws.

Brooke v. Aurora Behavioral Healthcare

Brooke v. Aurora Behavioral Healthcare, settled in 2021, was a Private Attorneys General Act (PAGA) case focusing on working conditions and denial of meal breaks. Brooke had significant implications for wage and hour law by addressing systemic issues within workplace environments that indirectly affect employee compensation.

Our firm represented nurses who exposed severe health and safety violations at Aurora Behavioral Healthcare facilities. The settlement included comprehensive changes to workplace policies, ensuring safer conditions for employees moving forward. This case highlighted how improving working conditions can have a positive impact on overall employee compensation and well-being.

Ha v. Google

In Ha v. Google, filed in January 2016, our team at Sanford Heisler Sharp tackled an off-the-clock overtime issue involving contract recruiters employed by Google through staffing companies. Plaintiffs alleged that they were required to perform work outside their scheduled hours without receiving appropriate overtime pay, violating California labor codes.

The $5.5 million settlement achieved in this case underscored the necessity for employers to compensate all hours worked by their employees accurately. It also brought attention to the exploitation faced by contract workers in tech companies, setting a precedent for future cases involving off-the-clock work.

In re Novartis Wage and Hour Litigation

In re Novartis was one of our firm’s landmark cases involving overtime misclassification under the FLSA. Initially filed separately in California and New York federal courts before being consolidated in New York, this class action involved approximately 2,500 sales representatives who were denied overtime wages between March 2000 and April 2007.

After years of litigation, including a favorable ruling from the United States Court of Appeals for the 2nd Circuit in July 2010 overturning summary judgment against plaintiffs’ FLSA claims, Novartis agreed to settle for $99 million in February 2011. This historic settlement reinforced legal standards around employee classification and fair compensation practices within large corporations.

Luque, et al. v. AT&T Corp., et al.

In Luque, et al. v. AT&T Corp., et. al., Sanford Heisler Sharp McKnight represented thousands of AT&T managers who were wrongly classified as exempt from overtime pay under both federal (FLSA) and state wage laws across multiple jurisdictions, including California, Connecticut, and Georgia. This culminated in a unified class action certified by the United States District Court for the Northern District of California in November 2010, resulting in a $28 million settlement benefiting more than 1,300 managers.