Wage and Hour

If you are interested in consulting with me about your wage and hour situation, please contact my office.

Federal law requires that most employees be paid a minimum wage of $6.55 per hour (as of 24 July 2008) and be paid 150% of the regular wage (which may be more than the minimum wage) for each hour over 40 in a work week. There are many exceptions to both parts of that statement. Here are some typical violations:

Minimum wage:

Deductions -- An employer may not deduct the cost of required uniforms from the worker’s pay, if that would reduce the worker’s pay below the minimum wage for any work week.

Cash shortages -- An employer cannot deduct cash shortages from the worker’s wages, if that would reduce the worker’s pay below the minimum wage for any work week.

Tips -- Tipped employees may be paid 50% of the minimum wage only if the amount of the worker’s total income does not go below the minimum wage for a particular work week. (To be considered a “tipped employee,” the individual worker must usually receive more than $30 per month in tips.)

Commissions -- Commission employees must be paid at least the minimum wage each work week. Recently, the U.S. Labor Department sued a company that was paying its commission employees on a monthly basis, without making sure they were receiving at least minimum wage for each week.

No time records -- If the employer keeps no time records at all, there may be a violation of the minimum wage law.

Overtime pay:

Generally -- A worker working more than 40 hours in a work week must be paid 1-1/2 times the regular rate for each hour over 40.

Working through lunch -- If you work through lunch, you should be paid for the time. You must get at least 30 minutes of time with no work duties – time that you can spend as you want to – or the employer must pay you.

Comp time -- Public employers are allowed to use a “comp time” system so that excess hours in one week are compensated by time off in a later week. The time off must be 1-1/2 times the amount of overtime. Private employers must pay overtime and may not use “comp time.”

Work at home -- If the employer requires the employee to do work before leaving home or after returning home, the employer must pay for this time. An example: a service worker has to call into work to get the first assignment of the day and must drive from home to that first assignment. The time spent getting the assignment and getting to the customer’s location may be time for which the worker should be paid.

Salaried employees -- Even if the employer says that an employee is “salaried,” the worker may be entitled to overtime pay in certain situations. To be exempt from the overtime rule, the employee must be paid at least $455 per week and have duties that qualify the worker as an executive, manager, administrative employee, or professional. These exceptions usually apply if the worker
• is directly related to the management of his or her employer's business, or
• is directly related to the general business operations of his or her employer or the employer's clients, or
• requires specialized academic training for entry into a professional field, or
• is in the computer field, or
• is making sales away from his or her employer's place of business, or
• is in a recognized field of artistic or creative endeavor.

Prohibiting overtime -- An announcement by the employer that no overtime work will be permitted, or that overtime work will not be paid for unless authorized in advance, will not impair the worker’s right to compensation for the overtime hours that are worked.

Cash payments -- Some employers pay for overtime hours “off the books” by making the payment in cash without reporting the hours on the pay check. This may be a violation of the overtime law.

For more information on wage and hour law, go to my Employee Rights and Information Center.

If you are interested in consulting with me about your wage and hour situation, please fill out this questionnaire.

Overtime: not just for blue-collar workers

Legal Times newspaper reports on a growing trend in overtime cases in Drug Salespeople Sue for Unpaid Overtime: Following what lawyers describe as a growing trend in class action overtime litigation, thousands of pharmaceutical representatives are suing eight major drug companies over unpaid overtime for all the hours they spend hawking drugs in doctors' offices.

Currently, more than a dozen such pharmaceutical overtime lawsuits -- all of them filed in recent months -- are pending in California, Connecticut, New Jersey and New York. Several more are expected to be filed this week in New York, Pennsylvania and possibly Minnesota.

Defendants include AstraZeneca, Pfizer Inc., Johnson & Johnson, Amgen Inc., Eli Lilly & Co., GlaxoSmithKline PLC, Bayer Corp. and Hoffman-LaRoche Inc., which had oral arguments scheduled for Monday. ...

In the pharmaceutical cases, plaintiffs allege that drug companies are misclassifying them as salespeople, denying them overtime even though they work 50- to 60-hour weeks. They argue that they're not actually selling anything, but rather acting as public relations representatives who memorize carefully worded scripts about drugs.

"These reps aren't making sales. They're marketing products to doctors ... They are not sales reps, but pharm-bots who do and say as they are told," said Eric Kingsley of Los Angeles-based Kingsley & Kingsley, who is representing plaintiffs in several of the lawsuits.

Some company officials denied the allegations, while others declined comment.

Mortgage loan brokers owed minimum wage, DOL claims

The Miami Herald reports:

The U.S. Department of Labor has filed a lawsuit against a mortage broker with local operations, alleging the company owes at least 200 loan officers more than $239,000 in back pay.

Ohio-based Alliance Mortgage Group Inc. and Credit Financial Services did not pay its overtime-eligible loan officers properly, providing only a monthly commission and in some cases wages that were lower than the federal minimum wage, the department's Wage and Hour division said in a statement.

Fifty-one of the 211 employees listed in the complaint are from Alliance Mortgage's South Florida locations in West Palm Beach, Boca Raton and Aventura. Payments owed the local employees ranged from more than $150 to almost $2,150, according to the complaint.

Comment: A copy of the complaint is available here.

Under the Fair Labor Standards Act, an employer must pay an employee at least the minimum wage ($5.15 per hour), even if that employee is working on a commission system. The complaint alleges that many of Alliance's mortgage brokers did not earn enough in commissions to give them at least the minimum wage.

Another point to note about the suit: the Department of Labor sued not only the corporations that employed the brokers, but also the president and chief financial officer of the corporations. As the guys who set the compensation policy of the corporations, they are liable along with the actual employers.