What Is the Penalty for an Employer Not Paying Overtime?

In the U.S., American workers are protected by laws designed to prevent employers from abusing their rights in matters of discrimination, benefits, and wages. Unfortunately, however, violations of these statutes are a continuing problem for many workers, especially when it comes to wage theft.

If your company refuses to pay you for the overtime hours you put in, they may have violated wage and hour laws and owe you compensation. To better understand the employer penalty for not paying overtime and the steps you need to take to get paid, contact the experienced attorneys of Morgan & Morgan right away to discuss your case.

Industries That Experience Wage Theft the Most

No matter what sector you work, or seniority you have at your job, you may find yourself a victim of wage and hour violations. Unfortunately, however, several industries frequently experience instances of these unlawful wage actions, including: 

• Childcare
• Factory workers
• Call centers
• Internships
• Construction
• Foodservice
• Landscaping
• Nursing
• Home care
• Retail
• Hospitality
• Janitors
• Parking attendants
• Restaurants
• Textile workers

The hardship caused on employees whose wages are withheld or unfairly calculated to save the company money can be devastating. Fortunately, unpaid overtime lawyers like those at Morgan & Morgan have the in-depth knowledge and skill to help you get compensated for that lost income.

Importance of the Fair Labor Standards Act

One of the most important legislations that protect an employee's rights to fair wages and overtime pay is the Fair Labor Standards Act of 1938 (FLSA). This law governs the following rule for overtime: 

Employees who are considered nonexempt must be paid a minimum of 1.5x their regular pay rate when working over 40 hours in a given week. 

This means that if you put in 45 hours at your job in a workweek, you would receive 40 hours at your regular hourly rate and time and a half for the additional five hours. Some salaried employees and those who hold certain roles within their companies are exempt from these laws and will not be owed an overtime rate like their nonexempt peers. 

Employees that may not qualify for FLSA overtime protections include:

• Domestic service employees working from home
• Railroad workers
• Farmers 
• Salespeople in specified industries in the FLSA law
• Seamen serving on American-owned vessels
• White-collar employees earning income each week outlined in the FLSA law
• Some service employees, including those in retail
• Taxi operators
• Employees who work at movie theaters

When in doubt about your exemption status under the FLSA, it's best to consult with a qualified attorney familiar with federal and state wage laws. Never assume your employee classification assigned to you is accurate until you have spoken with a legal professional in this area of employment law.

How Employers Violate Overtime Laws

Unless you're classified as an exempt worker, under federal overtime law, your employer must pay overtime wages for any hours you work over 40 hours in a workweek. This doesn't stop companies from finding ways to avoid paying these hours owed to their workers, though. 

Below are some of the most common ways that employers violate state and federal law:

• Claim that because you are a salaried employee, you automatically don't qualify for overtime
• Purposely excluding some of your overtime hours when calculating your pay 
• Having workers do additional work while not on the clock
• Using round-down time clocks
• Denying overtime pay based on an employee's title in the company 
• Basing overtime a two-week pay period of 80 hours and not the legally required 40-hour work week. 
• Intentionally leaving out regular rate payments for overtime, like bonuses or commissions, which results in a lower overall rate of pay

These are just some of many unlawful overtime pay practices that can open a company up to a lawsuit for wage theft. Often, companies that engage in these illegal pay schemes victimize several employees and count on their ignorance of the law. If you or someone you know is working extra hours but not receiving any overtime pay or getting paid less than you believe you deserve, be sure to consult with an attorney.

Misclassifying Employees to Avoid Overtime Pay

It's not uncommon for a company to purposely misclassify an employee as exempt from overtime to save on payroll costs. Misclassification often involves claiming that the worker is an independent contractor and not protected under FLSA guidelines.

It's estimated by the National Employment Law Project (NELP) that anywhere from 10 to 30% of employers do this, meaning that millions of workers across the United States are being robbed of rightfully earned overtime wages. The employer penalty for not paying overtime is severe. Consequences for this illegal action depend on state law where the business operates, but federal repercussions for violating the FLSA include:

• 20% of all paid wages
• 100% contributions for FICA 
• Up to $1,000 in criminal fines for each misclassification
• A possible maximum prison sentence of up to one year

In addition to these penalties for intentionally misclassifying an employee to exempt them from overtime pay, the person who committed the act is also personally liable.

Another consequence employers face for committing this crime is civil liability. Employees who were misclassified and lost wages, as a result, can file a suit to obtain compensation for their lost income. 

How to File an Unpaid Overtime Claim

After all of your dedication and hard work, the last thing you expect is for your employer not to pay your hours worked to benefit their organization. However, if you haven't received the overtime pay you are due according to the FLSA requirements, and your job won't comply, you may have no choice but to file suit. 

Your first step in filing an unpaid overtime complaint is to contact a seasoned wage and hour attorney familiar with the laws of your state and the FLSA. At Morgan & Morgan, we can assess your situation and determine what next steps need to be taken to begin the process of recovering the money you are owed and the damages incurred by your employer's actions. 

Evidence is important in these cases, which could include emails, text messages, and other forms of communication with your employer. A copy of your employment contract, previous pay stubs, and other important documentation will also be necessary. If anyone else at your job is experiencing wage theft, you may want to bring a statement from them with you to your initial consultation, as well.

It would be best if you took legal action as soon as possible after your company starts refusing to pay you for your overtime hours. This is because each state has a statute of limitations for filing suit in these types of cases, so it's essential to reach out for legal assistance right away. With an attorney's help, you can ensure that you get paid, and the employer penalty for not paying overtime is enforced.

Qualities to Look for in an Unpaid Overtime Attorney

When using your employer for unpaid overtime, you need to have the best legal advocate by your side when you do so. A skilled attorney familiar with FLSA law and wage theft case law is essential to protect your rights as an employee. You also want a lawyer that is more than just qualified but has extensive experience representing individuals in your predicament.

Below are some other qualities a quality unpaid overtime attorney should possess: 

Proven Experience

Wage theft suits involving unpaid overtime can get complicated fast, especially when there are multiple workers involved. You need to work with a legal professional that has represented other individuals in your situation and is well-versed in local, state, and federal law impacting your case. 

Offers Free Initial Consultations

You've already lost a significant amount of wages. Any wage and hour attorney you approach about your case should provide a free initial consultation to assess your overtime case. Legal professionals in this area of law generally won't require any payment upfront for their services either. Typically, they will offer a contingency fee agreement where they receive an agreed-upon percentage of your compensation award if you win. 

They Have a National Presence

Wage and hour attorneys that operate on a state-wide level have the experience, network, and legal resources available to represent your case adequately. So whether your case ends with a negotiated settlement or your attorney feels your matter should go to trial, you can be sure they will be with you every step of the way.

Proven Track Record of Success

It's one thing for a law firm to claim they have a track record of success versus being able to show it. For example, unpaid overtime attorneys with Morgan & Morgan have obtained over $20 billion in settlements and jury awards. Likewise, since 1988 our network of highly skilled lawyers has dedicated their efforts to help workers fight back against abusive pay practices used against them by their employers.