Wage and hour matters usually manifest when disgruntled employees feel they have not been compensated properly for their work.  Often, wage and hour matters are brought forth by employees who have been terminated, anticipate being terminated, or have just received a bad performance review.  This is especially true when it comes to overtime claims.

Companies should safeguard against possible problems by seeking counsel to properly classify employees as exempt from overtime pay.  Employers often mistakenly characterize workers as independent contractors to avoid payroll taxes, keeping track of hours worked or paying overtime.  Weinberg Law Firm can help properly assess how to classify workers to minimize liability exposure under the federal wage and hour laws.   

If workers are not properly classified, they may have claims for unpaid overtime against the company and individual owners/supervisors.  The employees may also be awarded double (liquidated) damages.  Further, if employees are successful on their claims, federal law mandates the company to pay the employees the cost of their legal fees in bringing a lawsuit.  If the employer’s conduct was willful, employees may seek unpaid overtime for the past three years.  

This is a predicament in which companies do not want to find themselves.  Weinberg
focuses on overtime pay issues, but can handle any wage and hour claim, including those that involve working off the clock, during breaks or lunch, and other violations covered under the Fair Labor Standards Act.

Common  questions:

Q. Our Company CFO wants to designate all inside sales people as independent contractors. By doing so, the company hopes to avoid the tax and overtime issues associated with employees.  Are we on the right path?

No. The path the company has chosen may lead to IRS audits, department of labor (wage and hour division) audits, TWC audits and possible immigration compliance investigations.  Merely labeling workers "independent contractors" won't automatically make them so.  Each Federal and state law has its own standards and regulations that determine if the worker is truly an independent contractor or an employee.  Even if the IRS determines the worker is an independent contractor, its determination is not binding on other Federal or state agencies.  An internal audit should be performed by both an attorney and a CPA with experience assessing independent contractor issues.  Additionally, immigration laws need to be addressed.

Q. Our business has in-house telemarketers who are paid $10.00 an hour plus time and ½ for all hours worked over 40 hours in the workweek.  They also receive monthly bonuses if certain sales quotas are met.  Do we need to include these bonus payments in their overtime rates?

Yes.  First, it must be determined the amount of bonus the employee was paid for each week.  Then divide the weekly bonus by the total number of hours the employee worked for that particular week.  This hourly amount must then be added to their regular hourly rate of pay before calculating the overtime rate.

Q. I am secretary who performs various clerical work for my company.  I am paid a salary and work over 50 hours a week.  I have been told that I am not entitled to overtime because I receive a salary.  I am not required to keep track of my time, but I do so for my own records. Am I not entitled to overtime?

Many employers make the mistake of paying an employee a salary to avoid paying overtime even if the employee is not performing job duties that make him exempt from receiving overtime pay. Generally, such exempt status is limited to those who are managers, supervisors, administrative personnel, professionals, outside sales people or certain computer professionals. If a position does not meet certain exempt job duties test under wage and hour laws, merely paying a weekly salary will not make the position automatically exempt from tracking hours worked and paying overtime. Assessing who is and is not exempt from receiving overtime is a fact sensitive analysis that should be reviewed with an attorney or CPA.