Our Frequently Asked Questions cover everything from the basic protections afforded workers by the Fair Labor Standards Acts and calculating the overtime you deserve to what the Act says about employer retaliation.
Wage & Hour Violations: Frequently Asked Questions
To jump straight to the answers you need, follow the links below:
- FLSA Basics: What Are The Act’s Minimum Wage & Overtime Requirements?
- How To Calculate Your Regular Rate
- Tipped Employees: Regular Rate Specifics
- Is Anyone Exempt From The Wage & Overtime Provisions?
- Employees Who Make Commission: Are They Exempt?
- Is “Mandatory Overtime” Legal?
- Can Lump Sums Count As Overtime Pay?
- Can Employers Require Pre-Approval For Overtime?
- Should I Report A Wage Violation Or Contact A Lawyer?
- What Damages Can I Win In A Wage & Hour Lawsuit?
- Can I Be Fired For Filing A Lawsuit?
- Why Do I Need A Lawyer?
Since July 24, 2009, the federal minimum wage has been at $7.25 per hour. If your job is covered by the Fair Labor Standards Act, you’re entitled to at least that much.
Note that many states have passed their own laws mandating higher minimum wages. To find out if you live in one, click here.
How Much Is Overtime?
According to provisions in the FLSA, a worker’s overtime pay equals one-and-one-half their “regular rate” for a given workweek, how much they made per hour for that week.
A workweek under the Act, also called the “FLSA threshold,” is defined as 40 hours worked
But regular rate might not just be a worker’s hourly wage; it may also include expenses that you paid for on your employer’s behalf, certain types of bonuses and commissions.
If you work more than 40 hours in one workweek, and are entitled to overtime pay, you’re employer will have to do some math.
How Do I Calculate My Regular Rate?
If you only make an hourly wage, your regular rate is the same as that wage. Here’s an example:
Claire worked 48 hours in one week. She’s not exempt from the FLSA, so she’s entitled to overtime pay. Claire only makes hourly wages at a rate of $8.00 per hour: that’s her “regular rate.”
Since $8 multiplied by 1.5 is $12, she’ll make $12 for every hour she worked over 40. At the end of the week, Claire is paid $320, for 40 hours at her regular rate of $8, and another $96 for the 8 overtime hours she worked, making a grand total of $416.
But what if Claire is also paid a bonus that week? The FLSA defines two types of bonuses. One type must be included in Claire’s regular rate, while the other type doesn’t have to be.
Let’s say that Claire’s bonus, $48, was offered because of her perfect attendance record. Most bonuses like this, ones that are tied to job performance, have to be included in a worker’s regular rate. Here’s how Claire’s employer should calculate her regular rate:
Just like last week, Claire worked for 48 hours. Her hourly wage is still $8 per hour, but now we have an extra $48 that also needs to be included. First, Claire’s employer will calculate her “straight-time compensation”:
48 hours times $8 per hour plus $48 equals $432.
Then her employer will divide that straight-time compensation by how many hours Claire worked:
$432 divided by 48 hours is $9 per hour.
That’s Claire’s regular rate for this workweek: $9. So her overtime wage, $9 times 1.5, is $13.50.
Finally, Claire’s employer will multiply the 40 hours she worked by her new regular rate: 40 hours times $9 an hour is $360. Then they’ll add her overtime: 8 hours at $13.50 per hour is $108. Claire’s total pay for the week is $108 plus $360, or $468.
I Make Tips. Is My Regular Rate Different?
If you make more than $30 in tips per month on a regular basis, you’re considered a “tipped” employee under the FLSA.
This can have a major, and lawful, effect on your hourly wages: employers are allowed to reduce your hourly rate below the federal minimum wage, as long as your hourly rate and tips per hour don’t fall below the minimum when they’re added together.
Employers are not allowed to lower your hourly wage below $2.13 an hour, no matter how much you make in tips. However much an employer subtracts from the federal minimum wage to account for tips is called a “tip credit.” The maximum tip credit is $5.12, since $5.12 plus $2.13 adds up to $7.25, the minimum wage.
Calculating overtime wages for a tipped employee is complex, so here’s a concrete example:
Drew works at a restaurant and regularly receives tips. His employer takes the maximum tip credit allowed by federal law: $5.12. One workweek, Drew works 45 hours, five hours above the FLSA threshold of 40.
To calculate Drew’s overtime wage, his employer takes the minimum wage of $7.25, rather than Drew’s actual cash wage, and multiplies it by 1.5, equaling $10.88. Then Drew’s employer subtracts the tip credit from that amount, making a regular rate of $5.76 per hour. In the end, Drew is paid $28.80 in cash wages for his five hours of overtime.
If Drew made more than $2.13 as his cash wage, his overtime rate would be higher than $5.76.
Is Anyone Exempt From The Fair Labor Standards Act’s Overtime Pay Requirement?
Yes, although most employees are entitled to overtime pay.
Here’s a simple, three-part test to help you determine if you may be exempt from the FLSA’s overtime provisions. A worker’s job has to satisfy all of these conditions together; if you only meet two of them, but not the third, you’re probably “nonexempt” and entitled to overtime:
1. You make at least:
- $455 per week
- $910 biweekly
- $1,971.66 monthly
- $23,660 per year
2. You receive a fixed salary, determined in advance, that doesn’t change based on how many hours you actually work
3. You can accurately be classified as performing one of the following categories of job duty:
- Executive – you supervise other employees; managing others is the main duty of your employment
- Administrative – you keep a business running, performing office work of a “nonmanual” nature that relates directly to general operations
- Professional – you perform “intellectual” work that requires advanced knowledge, usually symbolized by a graduate degree or higher
For these job descriptions, the FLSA doesn’t care what you’re job is called; it only cares what you actually do. If you’re title is store manager, but you spend more than 20% of your time ringing people out at the register, you are very likely nonexempt and entitled to overtime wages.
Fraudulent employee misclassification is one of, if not the, most common wage violations in America. To learn more about the nuanced distinctions between “exempt” and “nonexempt” employees, click here.
Are Salaried Employees Entitled To Overtime?
Yes, many salaried employees are entitled to overtime pay, although employers will often tell these workers that they’re exempt based on their job description.
Only salaried employees who make $23,660 or more per year, and receive a fixed salary, and fit into one of the three categories we described above, are exempt from the FLSA’s minimum wage and overtime pay requirements.
What Is A Commissioned Employee?
In day-to-day conversation, commissioned employees receive a sum of money for having completed some task, usually meeting a sales goal or making individual sales. Some employees make all of their money through commissions, while others receive commissions in addition to an hourly wage or salary.
Many employers tell workers that employees making money on commission are not entitled to overtime pay, or that commissions don’t count as payments for hours worked. Both of those statements are lies.
Most Commissioned Employees Are Entitled To Overtime
For the FLSA, most commissioned employees, including:
- inside salespeople,
- workers tasked with business development,
- recruiters and
are entitled to overtime.
Usually, only commissioned employees who are required to travel away from an employer’s workplace on a regular basis are exempt from the FLSA’s overtime provisions.
In retail and the service industry, some workers who make a commission may also be exempt. If your:
- regular rate is more than one-and-a-half times the minimum wage (either federal, $7.25, or an applicable state minimum wage) and
- more than 50% of your compensation for a “representative period” (generally no less than a month) comes from commissions on goods or services,
Is “Mandatory Overtime” Legal?
Many hospitals and health care institutions require staff nurses to work “mandatory overtime,” usually between 12 and 16 hours at a time, according to the American Association of Critical-Care Nurses.
This practice, employed by institutions struggling to keep workplaces fully staffed, takes an incredible toll on American workers. Many employees are now literally forced to sacrifice a fulfilling family life for their jobs.
Numerous studies have found that requiring nurses to work longer shifts isn’t just detrimental to their own lives; it’s directly linked to decreases in patient safety. Researchers at the University of Pennsylvania found that the risk of nursing errors increased by 300% when nurses were required to work more than 12.5 hours at a time.
But federal law doesn’t set any limit on the amount of hours that an employer can require of their workers. In other words, “mandatory overtime” is perfectly legal under the FLSA. Thankfully, many states have taken a stand against these dangerous practices in the health care industry.
To find state-specific regulations prohibiting mandatory overtime, visit our “Hourly Nurses” page.
Does A Lump Sum Count As Overtime Pay?
Your overtime pay must be calculated based on hours and regular rate, even if the lump sum payment for overtime is more than what your overtime wages would have been, if your employer had calculated them correctly.
If your employer pays you a lump sum as compensation for overtime, they have not paid you any overtime under the FLSA.
Can An Employer Require Approval For Overtime?
Employers are allowed to institute workplace policies prohibiting unauthorized overtime, and can discipline employees for violating that policy. But they still have to pay overtime wages, even if the overtime itself wasn’t pre-approved.
In other words, employers can actively discourage overtime by threatening a penalty, but are not allowed to withhold overtime wages.
If an employer “permits” you to work overtime, you are entitled to overtime wages for that work, no matter what the workplace handbook says about authorization.
Should I Report A Wage Violation?
Think your employer is stealing from you by violating a wage and hour law? You have two options: report a possible violation to the Department of Labor (DOL) or contact an attorney.
Employees are not required to report a potential violation to the DOL or a state agency before pursuing a private claim.
We suggest discussing your situation with a lawyer first.
For one thing, there’s no guarantee that the Department of Labor will investigate your complaint at all. So it’s important to discuss the issue with an attorney beforehand to ensure that you protect your right to sue, no matter what you ultimately decide to do.
Some violations may be more appropriately submitted for the Department of Labor’s consideration, while others are grounds for court action. In addition, if you work with other people who are being victimized by wage theft, you may be able to file a class action, significantly reducing any court or legal fees incurred in the course of legal proceedings.
To discuss these issues, we urge you to contact one of our experienced wage and hour violation attorneys for a free consultation.
What Damages Can I Win In A Wage & Hour Lawsuit?
If you file a wage and hour lawsuit and win, it’s likely that you’ll be able to recover all of the unpaid wages (or “back pay”) that you were entitled to in the first place. But you may also be eligible to secure “liquidated damages,” too.
As defined by the FLSA, “liquidated damages” are double the amount of unpaid overtime wages you recover. So if you secure $2,000 in back pay, another $2,000 would be added to your award. Liquidated damages are essentially awarded in place of lost interest.
Liquidated damages are the rule, not the exception, in wage and hour claims. Employers can only avoid paying these “double damages” if they can prove that the wage violation was in “good faith,” that they believed they were applying the FLSA’s regulations correctly but happened to be wrong. This is rare.
Punitive damages, exacted by a court to punish employers who willfully violated the FLSA, are possible in some courts but infrequent. Generally, punitive damages will only be awarded if you can prove that your employer retaliated against you for filing the claim.
Finally, if you win your case, the FLSA mandates that your employer reimburse you for out-of-pocket legal expenses. They’ll also have to pay an award for attorneys’ fees. If you don’t win, you will not be required to pay for your employer’s attorney fees, unless the court finds that you filed the claim in bad faith.
Can I Get Fired For Filing A Wage Violation Lawsuit?
The FLSA contains specific provisions prohibiting any form of retaliation against a worker who files a complaint with the Department of Labor’s Wage & Hour Division (the organization tasked with enforcing the Act) or brings a wage violation lawsuit against their employer.
“Retaliation” is defined as discharging (firing) or any other form of discrimination.
This protection extends to employees and employers who are “exempt” from the FLSA’s minimum wage and overtime pay requirements.
If you file a wage violation lawsuit, and your employer retaliates in some way, you may be able to file an additional, retaliation discrimination lawsuit.
Why Do I Need A Lawyer?
An attorney can help you understand your rights as an American worker, decide whether or not filing a lawsuit is a good option in your situation and walk you through the legal process.
Why do you need Tim Becker and the attorneys at WageAdvocates.com?
For over twenty years, Tim Becker has been standing up for the rights of American workers exploited by deceitful employers. In that time, he’s come to national recognition as a tireless advocate for workers rights, fair employment standards and business accountability.
You can learn more about Tim and the other lawyers who can help you here.
Learning more about your legal options is free. Just call or fill out our contact form to schedule a consultation today, at no charge and no obligation.
We believe that everyone deserves experienced legal counsel, regardless of their personal circumstances. That’s why we always offer our services on a contingency-fee basis: you pay nothing until we win an award or settlement in your case.
Highly recommended! I was worried when I was injured on the job and unable to pay my bills. Wage Advocates were with me through the entire process so that I didn't have to stress!"Rating: 5.0 ★★★★★