Department of Labor Audits
Top Overtime Violations Triggering Double Damages
Generally, under Federal law (FLSA) “non-exempt” employees must be paid overtime if they work more than 40 hours in a week. If employees are denied overtime, they may be awarded DOUBLE actual damages, PLUS attorneys’ fees.
Common Overtime Claims:
Paying Salary Only: without meeting “job duties” requirement: Some employers mistakenly pay a fixed salary to an employee who performs non-exempt job duties to avoid tracking hours worked and paying overtime.Many employers forget to look at the “duties” requirement to determine if the employee is exempt form overtime. Salary alone will pay an employee for all hours worked ONLY IF the employee meets an exemption. If the “duties” test is not met, (under the Administrative, Executive, Professional, Outside Sales and Computer Exemptions) such salaried employees are entitled to be paid for overtime if they work more than 40 hours in a workweek.
Unpaid Breaks: Breaks or meal time that are 20 minutes or less for non-exempt must be paid.
Misclassifying Employees As Contractors: Simply labeling someone a contractor and not withholding taxes does not make him/her one. Various factors must be met under the FLSA. If an employee is misclassified as a contractor, an employer may owe overtime and other employment benefits such as healthcare and retirement.
Inside Sales: Not paying certain inside sales people overtime. Generally, only outside sales people have a specific exemption from overtime.
Comp Time: Allowing private sector employees to take “comp time” (in a different workweek) in lieu of receiving overtime pay. Generally, only federal, state or local government employees may receive comp time.
Excluding Travel Time Between Customers/Patients/Offices: Although commuting directly from home to work is not compensable work time, travel time must be paid between customers, patients or offices for non-exempt employees (such as local delivery drivers, CNAs, healthcare workers).
Unapproved Overtime: Failing to pay overtime when an employee does not obtain prior approval to work the overtime. Although an employee may be disciplined for failing to receive approval, the employee must still be paid.
Excluding Bonuses/Commissions From Regular Rate: Failing to calculate commissions and non-discretionary bonuses into a regular rate of pay before calculating the overtime rates. Some exceptions apply for holiday/special occasion bonuses.
Paying By The Job/Foot/Unit: Overtime must still be paid to those who perform non-exempt work by the job/foot/unit.