Defend Your Right to Minimum Wage or Overtime Payment

Overall, the Fair Labor Standards Act (FLSA) requires that most employees be paid a minimum wage and overtime when more than 40 hours are worked in a single work week.

Who doesn’t pay minimum wage? Employers can cheat an employee out of minimum wage when not all work hours are counted as time worked. This failure to pay for all hours worked can happen even if the hourly rate exceeds the minimum wage of $7.25 per hour.

For example, Fred gets paid $7.25 per hour for a 40 hour work week (or 40 hrs. x $7.25 = $290.00 per week). However, Fred works through lunch, or before or after his shift, an additional 10 hours per week. In that case, Fred ‘s weekly-pay of $290.00 is really an hourly rate of only $5.80 per hour ($290.00 divided by 50 hrs. = $5.80 per hour). Fred is not even making minimum wage when all of his work time is taken into account.

Who doesn’t pay overtime correctly? Employers can cheat an employee out of proper overtime pay in a number of ways. Three of the most common mistakes are:

First, off-the-clock work: Employees are cheated out of overtime when not all time worked is counted as work time. Like Fred in the above example, Fred is working 50 hours per week but only being paid for 40 hours because he is “working off the clock.” Ten hours of that time is lost overtime pay at 1 ½ times his Regular Rate of pay.

Second, a miss-classified job: Some jobs are exempt from the overtime requirement. Workers who are miss-classified as one of these exempt jobs should be earning overtime pay.

Third, overtime is not calculated correctly: Overtime pay is 1 ½ times the worker’s Regular Rate of Pay. If Mary makes $10.00 per hour; each overtime hour pay is $15.00 ($10.00 x 1 ½ = $15.00). Some workers are cheated out of overtime when they are paid only straight time (for Mary $10.00 per hour), no matter how many hours they work. Some workers are paid a day rate and not paid overtime at the 1 ½ rate. Some workers are paid an hourly rate plus a small commission or bonus based on performance. The Overtime Rate for these workers must include these extra forms of pay so that the Overtime Rate for them is more than 1 ½ their hourly rate alone.

Who Is Eligible for FSLA Coverage?

The U.S. Department of Labor designates that employees of companies that take part in interstate commerce or work related to the sales of goods or materials are considered eligible for the rules laid out in the FSLA. Covered enterprises (employers) include:

  • Employers with an annual gross volume of sale/business that constitutes no less than $500,000
  • Public agencies
  • Institutions charged with caring for the infirm, disabled, or mentally ill

However, the DOL explains that additional entities may be eligible for FSLA coverage, even if their institutions do not fall under these categories.

Who is an Employee and Who is an Independent Contractor?

It is a hotly litigated question right now which workers are employees and which are independent contractors. What difference does it make? Employees must be paid minimum wage and overtime, and usually get the full range of employee benefits as other employees like: health insurance, 401k, vacation pay, etc. Independent contractors can be denied overtime and such benefits. It also can be cheaper for an employer to classify workers as independent contractors in order to avoid paying the employer’s portion of health insurance premiums and avoid paying unemployment and payroll taxes like the employer’s social security contribution.

Who is an employee and who is an independent contractor? This can be particularly complicated for new jobs in the gig economy. There are a lot of jobs like Uber and Lyft drivers, web designers, IT specialists, etc. that didn’t even exist a few years ago.

A few things to keep in mind in considering whether you are really an employee entitled to overtime instead of an independent contractor:

  • The job title doesn’t make you an independent contractor.
  • A written job contract calling you an independent contractor is relevant, but doesn’t make you an independent contractor.
  • Whether you are issued a W-2 or a Form 1099 at the end of the year may be relevant but doesn’t decide the issue.

The U.S. Supreme Court has on a number of occasions indicated that there is no single rule or test for determining whether an individual is an independent contractor or an employee for purposes of the FLSA. The Court has held that it is the total activity or situation which controls. Among the factors which the Court has considered significant are:

  • The extent to which the services rendered are an integral part of the principal’s business.
  • The permanency of the relationship.
  • The amount of the alleged contractor’s investment in facilities and equipment.
  • The nature and degree of control by the principal.
  • The alleged contractor’s opportunities for profit and loss.
  • The amount of initiative, judgment, or foresight in open market competition with others required for the success of the claimed independent contractor.
  • The degree of independent business organization and operation.

There are also certain factors which are not relevant to whether there is an employment relationship. Such facts as the place where work is performed, the absence of a formal employment agreement, or the time or mode of pay are not relevant to who is an employee and who is an independent contractor.

The U.S. Department of Labor identifies these typical problems:

(1) One of the most common problems is in the construction industry where contractors hire so-called independent contractors, who in reality should be considered employees because they do not meet the tests for independence. (2) Franchise arrangements can pose problems in this area as well. Depending on the level of control the franchisor has over the franchisee, employees of the latter may be considered to be employed by the franchisor. (3) A situation involving a person volunteering his or her services for another may also result in an employment relationship. For example, a person who is an employee cannot “volunteer” his/her services to the employer to perform the same type service performed as an employee. Of course, individuals may volunteer or donate their services to religious, public service, and non-profit organizations, without contemplation of pay, and not be considered employees of such organization. (4) Trainees or students may also be employees, depending on the circumstances of their activities for the employer. (5) People who perform work at their own home are often improperly considered as independent contractors. The Act covers such homeworkers as employees and they are entitled to all benefits of the law. See the DOL Fact Sheet at:  https://www.dol.gov/whd/regs/compliance/whdfs13.htm.

If you are miss-classified as an independent contractor instead of an employee, you may be entitled to overtime at 1 ½ times your Regular Rate of pay for a period of two years and three years if the violation was “willful” under the FLSA.

Details about Minimum Wage and Overtime in Georgia

Overall, Georgia adheres to the federal minimum wage of $7.25 for employees who are eligible for coverage by the FSLA. However, state laws indicate that workers in the State of Georgia who are not fully eligible for coverage under the FLSA may receive a state minimum wage of $5.15 (potentially).

Jobs That Are Exempt from Overtime.

The FLSA is a detailed statue with a lot of exceptions. The most commonly used exceptions to deny overtime pay are:

  • Independent contractors and not employees.
  • The job is entitled to the Executive Exemption because it is paid a salary and it regularly calls for the supervision of 2 or more workers.
  • The job is entitled to the Administrative Exemption because it is paid a salary and regularly calls for the exercise of independent discretion and judgement.
  • The job is entitled to the Professional Exemption. The employee’s primary duty must be the performance of work requiring advanced knowledge, defined as work which is predominantly intellectual in character and which includes work requiring the consistent exercise of discretion and judgment. The advanced knowledge must be in a field of science or learning. The advanced knowledge must be customarily acquired by a prolonged course of specialized intellectual instruction.

In general, the above exemptions must meet a two-part test: (1) paid a salary and (2) certain job duties.

JUST BECAUSE A JOB IS PAID A SALARY DOES NOT MAKE IT EXEMPT FROM OVERTIME PAY. The job also has to meet the duties test for the exemption from overtime. Otherwise, an employer could avoid all overtime by paying every job a salary.

JUST BECAUSE A JOB IS PAID A SALARY DOES NOT MEAN IT PASSES THE SALARY TEST. As to the salary part of the test, a salary is the same pay for the week no matter how many days or hours are worked. For example, a supervisor who misses a day of work because the plant is closed due to weather and has her pay deducted for that week is not paid on a weekly salary basis and deserves overtime pay.

The employer will also lose the exemption if it has an “actual practice” of making improper deductions from salary. Factors to consider when determining whether an employer has an actual practice of making improper deductions include, but are not limited to: the number of improper deductions, particularly as compared to the number of employee infractions warranting deductions; the time period during which the employer made improper deductions; the number and geographic location of both the employees whose salary was improperly reduced and the managers responsible; and whether the employer has a clearly communicated policy permitting or prohibiting improper deductions. If an “actual practice” is found, the exemption is lost during the time period of the deductions for employees in the same job classification working for the same managers responsible for the improper deductions. See the DOL Fact Sheet at:  https://www.dol.gov/whd/overtime/fs17g_salary.pdf.

What Duties Are Required to Exempt from Overtime?

As to the duties part of the Executive Exemption test, there are many common problems. Often lead or working supervisors don’t really have regular input into hiring and firing and fail the Executive exemption test. See the DOL Fact Sheet at:  https://www.dol.gov/whd/overtime/fs17b_executive.pdf.

Similarly, many jobs fail the Administrative Exemption duties test because they do not involve independent discretion and judgment. The job follows a detailed policy manual or is so micro-managed that no real independent discretion or judgment is exercised. See the DOL Fact Sheet at:  https://www.dol.gov/whd/overtime/fs17c_administrative.pdf.

As to the Learned Professional Exemption, many jobs don’t really involve duties that involve the specialized degree or expertise required for the Professional Exemption. The employee’s primary duty must be the performance of work requiring invention, imagination, originality or talent in a recognized field of artistic or creative endeavor.  For example, many law school graduates hold management or finance jobs that are important for the company but are not really doing “attorney” work. Similarly, jobs that are called “field engineers” or “project engineers” can be primarily equipment or software installers following detailed plans or manuals that do not involve engineering judgment. These jobs don’t have the duties or require the problem solving of engineering work to qualify for the Professional Exemption. These workers are entitled to overtime. Finally, just because a job is licensed by a state or trade organization does not mean it is included under the Learned Professional Exemption, e.g. paralegals, cosmetologists, plumbers. See the DOL Fact Sheet at:  https://www.dol.gov/whd/overtime/fs17d_professional.pdf.

Enforcing Minimum Wage and Overtime Laws in the United States

The FLSA allows workers to file a lawsuit to recover minimum wage or overtime pay. From the date of the filing of a lawsuit, the employee can recover two years of owed overtime or minimum wage going backwards from the date of the lawsuit filing.  If the violation was a “willful” filing, the employer can recover up to three years of owed minimum wage or overtime pay under the FLSA.

The statue also provides for the recovery of attorney’s fees and costs to an employee plaintiff who recovers minimum wages or overtime pay.

Making a Case for Lost Wages in Georgia

If you have worked overtime and believe your employer is either withholding pay or has wrongfully deducted rightfully-earned money, here are some steps you can take to determine if you have wrongfully lost wages:

  • Collect your W-2 or 1099 forms from the most recent work year(s),
  • Collect your pay stubs or bank deposit records,
  • Identify any security card records to enter or exit the building,
  • Identify e-mails or phone records that would prove work outside of your normal shift,
  • Collect any personal calendars or diaries showing work activities or dates and times worked,
  • Collect any company policies or contracts identifying your status as an employee or independent contractor.

Remember not to copy or remove any documents or electronic information that is the property of the Company. This protects you from any accusation of theft or violation of confidential information agreements.  Your attorney can request such information be preserved and can obtain the records if a lawsuit is filed.

Reclaim Your Wages and Overtime Today!

The U. S. Department of Labor has estimated that as many as 80% of employers fail to fully comply with the FLSA in some respect. Consider that the FLSA is a highly complex statute, interpreted by hundreds of pages of valuable DOL Regulations. In the event that you have been victimized by an employer, you will require experienced legal assistance.

The Ken S. Nugent, P.C. Overtime and Unpaid Wages team of attorneys can help you determine whether you are owed overtime or minimum wage pay. Our team covers the entire state of Georgia. We have eight Georgia offices ready to protect workers in small town and rural areas who are being cheated on their earned overtime.  We have an office with overtime attorneys near you: Albany, Atlanta, Augusta, Columbus, Duluth, Macon, Savannah, and Valdosta.

We can help employees collect (1) back wages for all “Hours Worked” and any unpaid overtime, plus (2) liquidated damages in an additional amount of the same back wages and overtime, and (3) attorney’s fees and costs.

To reach one of our eight locations in the State of Georgia, click the chat bubble to send us a message or call us toll free at 1-888-579-1790 or request that one of our team of Overtime and Lost Wages attorneys contact you by leaving us your information or questions at  https://www.attorneykennugent.com/lostwages .