Most workers say their employer breaks wage-and-hour laws
September 24, 2009 by Sam NarisiPosted in: In This Week's E-Newsletter, Latest News & Views, Law
With wage-and-hour lawsuits on the rise, it’s more important than ever for companies to look at their practices and make sure they’re in the clear. As recent research shows, many employees think they’ve got the potential to win a lawsuit.
The majority of lower-level employees say their companies regularly commit minimum wage, overtime and other violations, according to a recent survey of over 4,000 low-wage workers. Overall, 68% of respondents said they’d been the victim of at least one pay-related violation in the previous week.
Specifically:
- 21% said they were paid less than the minimum wage in their jurisdiction
- Of employees who worked more than 40 hours in a week, 76% said they were underpaid for their overtime
- 70% of employees who came early or left late said they weren’t paid for the extra time, and
- Among workers who had amounts deducted from their paychecks, 41% believed the deductions were illegal.
The average employee lost $51 as a result, the researchers said. With wage-and-hour complaints up 77% since 2004 (and more employees in need of extra cash), companies should examine their payment practices and train managers to make sure they aren’t in danger.
To view the report, click here.
Tags: minimum wage, overtime, wage-and-hour
September 25th, 2009 at 9:40 am
I don’t disagree that there are employers who are not in compliance with the law. However, if you read the report this information is pulled from, you will see it is strongly union oriented. (And amazingly enough, sponsered by several unions and associations) I think the original report is biased, either through selection of workers, selection of translators, and/or authors of the report.
September 25th, 2009 at 11:28 am
Question- we have a lady in my office who had to take her vacation or lose it this week. She earned this vacation time last year when she was working 40 hours a week but now due to slow work she is only working 20 hours a week (4 hours a day). She is taking her week of vacation off but the company is only paying her for 20 hours instead of 40 hours, the rate which she earned it. Is this legal? Is it her fault for not taking it sooner?
Also I am a salary employee (Manager) and my hours were cut from 5 days to 4 and my pay was cut by 20%. There was no change in job description or expectations that I have been shown or singed. I still work at least 40 hours (my choice) a week and have been required to turn in a time card since I started here in which I show all my hours including hours worked at home. Is my employer safe doing this or should they do something different to not get in trouble? I have no intentions of going after them, I just want to make sure they are doing this right.
Thanks for your advice.
September 25th, 2009 at 11:59 am
G.S.
Regarding the vacation situation, it is my opinion that the employee is due the vacation that they accrued. If they accrued at a part time rate in increments of 4 hour days, then yes it is okay to pay them vacation at the rate you are doing. Caution, if the person had accured vacation at 8 hour day increments but was unable to take it, regardless of their workweek at this time, their vacation needs to be paid at what it was earned. What can change is the hourly rate that the vacation is paid. It is paid out at whatever is the employees current rate of pay.
For your situation, as long as your base salary still meets the FLSA regulations and the responsibilities are still appropriate for an exempt level position, it seems your organization is okay. An employer can track an exempt employees hours as long as they are not impacting the FLSA status. The question to consider is whether or not your position is correctly classified.
September 25th, 2009 at 12:35 pm
To GS,
Something sounds amiss here. As a general rule you don’t go messing with an exempt employee’s salary even if hours are cut. I suggest looking in the upper right of this page and check the recent posts section for “Trimming exempt salaries, the DOL rules”. This should give you the info you need to start your research. The big question in most minds will be, “If I question the payroll authority, will it cost me my job?” There are laws protecting whistle blowers and if your company is in violation of DOL pay rules then they will have to anti up for past infractions. They will audit the entire company in most cases and many employees may be part of the reconciliation. Good Luck!
September 25th, 2009 at 12:44 pm
Regarding your co-workers vacation, the company cannot take away vacation time that she has already earned but they can restrict the number of hours they approve for her to take at any one time. So yes, they can restrict her to only 20 hours for the week.
Regarding you: your employer is playing it safe by having you punch a timecard. There could be two different reasons, depending on whether you are exempt or non-exempt. If you are exempt, if you perform no work in any one day, your employer can pay that day out of any accrued vacation or PTO that you have on the books. If you have no paid leave available, the employer can legally “dock” your pay for that day. This is according to the US Dept of Labor, however some states may have labor laws that regulate this differently. The timecard is the documentation they need to justify either scenario. Another question is whether you signed an employment contract when you were hired that spelled out the number of hours you were expected to work, and what your annual salary would be for those hours. If you did, you may want to review the terms of wage adjustments in that contract. Typically, you would have had to sign an amendment or a new contract that spelled out the new terms.
If you are non-exempt, even though you are paid a salary, you can still be paid overtime if you work more than 40 hours in a week. The timecard is the means to track this.
September 25th, 2009 at 2:50 pm
G.S.,
I disagree with the previous posts re: the vacation. DOL/Wage & Hour has no jurisdiction over paid time off benefits. Some states have laws that protect vacation benefits. Ohio does not, so having a “use it or lose it” rule in Ohio is permissable. I had to forfeit 2 vacation days last year because I was too busy to get to use them.
DOL/Wage & Hour division has consistently held that exempt employees, paid on a salaried basis, may be required to keep time records. That does not jeopardize the exempt status as long as the time records are not used to make impermissable deductions from the employees’ salary. They have also consistently held that a fixed adjustment to someone’s salary that is commensurate with an anticipated reduction in hours is also permissable. It only jeopardizes the exempt status if the salary is regularly adjusted based on actual hours worked. DOL / Wage & Hour Administrator issued an opinion letter confirming this in January or February 2009. I can’t find it on the website now. It looks like all of the Opinion Letters issued by the former Administrator weren’t properly processed and were pulled for review by the new Administrator on March 2, 2009. The rules may change under the new Administration.
September 28th, 2009 at 11:49 am
I find that most employees that feel that employers violate the FLSA are confused about what the law allows and requires. The law is very confusing when getting down to the nuts and bolts of what is compensable and what is not. Of course, I have seen a few employers who were confused as well which does not bode well for those companies.
There is still confusion as to how to classify a position as exempt or not. Some it comes down to a judgment call and the DOL can later decide you made the wrong decision. There is confusion about what travel time is compensable. Some do not realize that the vacation and sick time do not count in the overtime calculation.
Concerning deductions, there are rigid requirements for garnishments and other deductions. Most employees feel that they will be contacted prior to a garnishment order, but my experience has been that courts order them without any contact with the employee. If you owe money to the Federal government, they will get it back on THEIR schedule.
While many states do not cover paid time off policies and practices, employees (especially exempt employees) have serious misunderstandings. I have had employees who have come in when scheduled for vacation and expect their 40 hours of vacation and time and a half for the hours worked. Imagine their surprise when they get paid for 40 hours split between their vacation and the hours worked and no overtime.
It also seems that no matter how much time and effort a company puts into training employees on the law and the rules, they still are going to believe that they are going to believe. Go figure.
September 29th, 2009 at 7:41 am
We have an hourly employee who gets two weeks, 80 hours, of vacation per year. This employee usually takes one week of vacation but never takes the second. As of now we are paying him for the second week of vacation but I am not sure if we are doing this correctly. He works 40 hours Monday thru Thursday (our company only works a 4 day work week) and then we pay him 10 hours of vacation on top of his 40 hours. We do this four times so he gets paid his 40 hours vacation. We do not pay him overtime since we look at it as he is actually working 40 hours and 10 hours are vacation – not work. Is this ok/correct?
October 5th, 2009 at 4:25 pm
HB – this is OK/correct under federal law and Ohio law. Time and a half is only legally required for all hours ACTUALLY WORKED in excess of 40 hours in the work week. Vacation, holidays, sick days, PTO, etc… do not have to be counted as “hours worked” for overtime purposes. However, what does your company policy say? If this is a union worker, what are the terms of the union contract? What are the requirements for overtime in your state?
Mike R is right. The federal FLSA is confusing enough, but we also have to balance that with state law, union contracts, and company policy.