Underpayment, Unpaid Overtime, and What You can Do When Your Employer Steals Your Wages

In today’s fast-paced work environment, many employees go above and beyond their required duties, often putting in extra hours to meet deadlines or support their teams. But what happens when those extra hours aren’t compensated? 

If you're putting in more than 40 hours a week and not getting paid for it, you might be a victim of unpaid overtime—and you’re not alone.

At Morgan & Morgan, we believe that every worker deserves fair compensation for their time and effort. If your employer is failing to pay you overtime wages, you may have the right to file a claim and recover the money you’ve rightfully earned. 

If your hard work has gone unpaid or underpaid, contact Morgan & Morgan today for a free case evaluation to learn more about your legal options.

What Is Unpaid Overtime?

Unpaid overtime refers to the hours an employee works beyond the standard 40-hour workweek without receiving the legally required overtime pay. Under the Fair Labor Standards Act (FLSA), most workers are entitled to time-and-a-half pay—1.5 times their regular hourly rate—for every hour worked over 40 in a single workweek.

Unfortunately, many employers try to cut costs by misclassifying employees, manipulating time records, or pressuring workers to perform tasks “off the clock.” These tactics are not only unethical—they’re illegal.

Common Types of Overtime Violations

Unpaid overtime can take many forms. Here are some of the most common violations:

Misclassification of Employees

Employers often label workers as “exempt” or “independent contractors” to avoid paying overtime. However, just because your employer says you’re exempt doesn’t mean it’s legally accurate.

Exempt employees are usually those in executive, administrative, or professional roles who are paid a salary and meet certain job duties. But job titles alone don’t determine exempt status—your actual job responsibilities do. If your duties don’t meet the FLSA’s exemption criteria, you may be entitled to overtime pay.

Off-the-Clock Work

Some employers ask—or expect—employees to clock out but continue working. This can include:

• Prepping before shifts
• Finishing up tasks after clocking out
• Attending mandatory meetings or training sessions
• Responding to emails or phone calls after hours
   

If you’re working without being clocked in, that’s unpaid labor, and you’re owed overtime if it pushes your total hours above 40 for the week.

Automatic Time Deductions

In some industries, especially food service and healthcare, employers automatically deduct time for meal breaks. However, if you’re required to work through your break—even partially—you must be compensated for that time.

Failure to Track Hours Accurately

Employers are legally required to maintain accurate records of your hours. If they don’t provide a reliable system for clocking in and out or if they alter records to avoid paying overtime, that’s a serious violation.

“Comp Time” Instead of Overtime

Some employers try to offer “compensatory time” instead of overtime pay, especially in the private sector. While government employees may receive comp time under specific rules, private sector employers are generally not allowed to offer comp time in place of legally required overtime pay.

Who Is Entitled to Overtime?

The FLSA generally requires that all non-exempt employees receive overtime pay. Factors that determine whether you’re exempt or non-exempt include:

• Your job duties: Not your title, but what you actually do every day.
• Your salary level: As of 2024, if you make less than $684 per week ($35,568 annually), you are likely non-exempt and entitled to overtime, regardless of your job duties.
• Your method of compensation: Hourly workers are typically non-exempt. Salaried workers can be either exempt or non-exempt, depending on their role.
   

Examples of Workers Commonly Denied Overtime

Unpaid overtime can affect workers across many industries. Here are some roles especially prone to violations:

• Retail workers expected to open or close stores off-the-clock
• Call center employees who are logged in before or after official hours
• Healthcare workers forced to work through breaks
• Delivery drivers or gig economy workers misclassified as independent contractors
• IT professionals who are salaried but perform non-exempt duties
• Warehouse staff required to undergo security checks on their own time
  
   

How to Know If You're Owed Overtime

You may be entitled to unpaid overtime if:

• You regularly work over 40 hours a week
• You’re paid hourly (or a low salary under $684/week)
• You’re asked to do tasks before or after your shift
• You’re expected to check emails, texts, or perform other duties outside normal hours
• You’re told to stay “on call” without compensation
   

Even if your employer insists you’re exempt or on salary, that may not be legally valid. It’s always worth consulting an attorney to review your situation.

What Are the Penalties for an Employer Not Paying Overtime? What Compensation Can You Recover?

Employers who fail to pay overtime as required by law can face several serious penalties. These penalties are designed to ensure employees receive the wages they’ve earned and to deter companies from violating labor laws.

Back Pay (Unpaid Wages)

The most immediate consequence is that the employer will likely be ordered to pay all unpaid overtime wages. Under the Fair Labor Standards Act (FLSA), employees must be paid time-and-a-half for any hours worked over 40 in a workweek. If that didn’t happen, the employer may be required to pay the difference.

Liquidated Damages (Typically Double the Owed Wages)

In many cases, employees are entitled not just to the unpaid wages but also to an equal amount in “liquidated damages.” That means if an employee is owed $5,000 in unpaid overtime, they may be entitled to a total of $10,000 ($5,000 in back pay and another $5,000 in liquidated damages).

The only way an employer can avoid paying liquidated damages is by showing that the failure to pay overtime was made in good faith and that they had reasonable grounds to believe their conduct was lawful. This is a high bar to clear.

Attorney’s Fees and Court Costs

If the employee brings a successful claim, the employer may also be required to pay the employee’s legal fees and court costs. This provision helps level the playing field, allowing workers to pursue their claims without worrying about the expense of hiring a lawyer.

Civil Penalties

In addition to paying the affected employee, the U.S. Department of Labor (DOL) may impose civil penalties against the employer. For repeated or willful violations of the FLSA’s overtime provisions, the DOL can assess a penalty of up to $2,014 per violation (as of 2024, adjusted annually for inflation).

Criminal Penalties

In rare and extreme cases, especially involving willful violations or falsified records, employers may also face criminal charges. These can result in fines or imprisonment, though criminal prosecution is uncommon and typically reserved for the most egregious cases.

Reputational Damage and Business Consequences

Beyond legal and financial consequences, a company’s reputation can suffer significantly if it’s found to have shortchanged its employees. This can affect customer trust, employee morale, investor confidence, and even the ability to win contracts or licenses in regulated industries.

Contact Morgan & Morgan for  Help

At Morgan & Morgan, we’re committed to standing up for workers whose rights have been violated. With over 35 years of experience and more than $25 billion recovered for our clients, we have the resources and dedication to take on powerful companies—and win.
 

Whether you’re still working for the employer or have already moved on, you have the right to pursue fair compensation. Don’t let your employer take advantage of you. We can help you hold them accountable.

Hiring one of our lawyers is easy, and you can get started in minutes with a free case evaluation.

Can I be fired for filing an overtime claim?

It’s illegal for your employer to retaliate against you for asserting your rights under the FLSA. If you’re fired, demoted, or harassed after filing a claim, you may be entitled to additional damages. Contact Morgan & Morgan to learn more about your legal options and how to protect your rights.

How many overtime hours can you work?

According to the Fair Labor Standards Act, there is no limit to the number of overtime hours you can work in a workweek. Unless you are an exempt employee, you are entitled to overtime pay if you are at least 16 years old and work over 40 hours in a work week. 

It is also important to note that the FLSA does not require your employer to pay you overtime if you work on weekends, holidays, or your off days. However, your employer must pay you overtime for those days if you worked more than 40 hours in that particular work week.

However, despite knowing these overtime laws, many rogue employers do not follow the rules. As a result, some employees work long hours without the additional payment they are entitled to. 

I feel like I’m underpaid. Are there any exceptions to the minimum wage law?

The minimum wage is in place to ensure that workers are reimbursed for their labor by at least a minimum standard. The goal is to prevent the exploitation of workers. 

Many people assume they are automatically covered by the minimum wage law, but the truth is that there are exceptions in place in certain industries and for certain jobs. Some of the exceptions to the federal minimum wage include workers with disabilities, employees under 20 years old during the first 3 months of their job, full-time students, student learners, tipped employees, messengers, and apprentices.

How does minimum wage apply to tipped employees?

Under the Fair Labor Standards Act (FLSA), the federal minimum wage for non-tipped employees is $7.25 per hour. For tipped employees, the federal minimum wage is lower due to the allowance of a "tip credit."

The federal minimum wage for tipped employees is $2.13 per hour, provided that the sum of this wage plus tips equals at least the federal minimum wage of $7.25 per hour.

The tip credit allows employers to count a portion of an employee's tips toward meeting the federal minimum wage requirement. The maximum federal tip credit is $5.12 per hour ($7.25 - $2.13 = $5.12).

Employers must ensure that tipped employees receive at least $7.25 per hour when combining their hourly wage and tips. If the total falls short, the employer must make up the difference—no exceptions.

State Minimum Wage

State minimum wage laws for tipped employees can vary significantly and may provide higher minimum wage rates and different tip credit rules than the federal standards. Some states have set their own minimum wage rates for tipped employees that exceed the federal minimum.

Several states, such as California, Washington, and Oregon, require employers to pay the full state minimum wage to tipped employees without allowing a tip credit. This means that tipped employees in these states must receive the state minimum wage plus any tips they earn.

Other states, like New York, Massachusetts, and Florida, allow a tip credit but often set higher minimum wages and lower maximum tip credits than the federal law. For example, New York has different minimum wage rates and tip credits depending on the region and type of industry.

Some states follow the federal minimum wage and tip credit standards, setting the tipped minimum wage at $2.13 per hour as long as the combined wage and tips meet or exceed $7.25 per hour.

What if I’m undocumented or don’t have a green card?

The FLSA protects all workers, regardless of immigration status. If you’ve worked without being paid fairly, you still have the right to take legal action.

Can I sue even if I no longer work for the company?

Yes. As long as you file your claim within the statute of limitations, you can still be eligible to recover unpaid wages. An experienced attorney can help you to ensure that you file correctly and on time, so act quickly before that window closes.

Is there a minimum amount of unpaid wages needed to file a claim?

There’s no legal minimum. Even small amounts of unpaid wages can add up over time—and you may also be entitled to double damages.

Am I being denied fair pay if my manager duties match a cashier's?

In some cases, people in the retail industry receive lofty titles but essentially perform the same duties as people working hourly. For instance, a retail store or similar outlet may hire you as an assistant manager and pay you a regular salary, but you may find that you perform the same work as a cashier or sales associate.

Sometimes, retail store owners hire people on a salary basis to avoid paying overtime. Rather than hiring several people to fulfill their business needs, they hire one and expect them to work as much as the job requires.

If you’re working a job and find that you handle many of the same duties as hourly workers, you may be underpaid, especially if you consistently work overtime. Schedule a free case evaluation with a labor and employment lawyer at Morgan & Morgan to find out more.

How can a lawyer help with my unpaid wages?

If you’ve worked overtime and haven’t been paid for it or if you’re a tipped employee who has been cheated out of wages, you’re not alone—and you don’t have to accept it. The law is on your side, and so are we.

Let Morgan & Morgan help you fight for the wages you’ve earned. Our experienced employment attorneys are here to guide you every step of the way, with no upfront costs and no fees unless we win.

Get your free case review today. You work hard. Let us make sure you get paid for it.