The Lacy Employment Law firm

The Lacy Employment Law firm

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Labor Lawyers Can Resolve Your Wage and Hour Issues

Labor and employment lawyers handle a variety of different legal issues in the workplace.  As employment lawyers, we deal mostly with wrongful termination issues.  

Labor lawyers, however, can help you recover wages to which you are entitled.  Employers often improperly withhold them.

We see employers misclassify employees as exempt or non-exempt.  We also see employers fail to pay minimum wage or overtime. 

If you think you have a dispute with your employer over lost pay, give us a call.  If you haven’t received your overtime pay, just let us know.  We can help.  And at no fee to you unless we recover on your behalf.

We may be able to help you file a lawsuit under the Fair Labor Standards Act (FLSA).  We may also be able to help you participate in or form a wage and hour class action.

To help inform your inquiry into your company’s payment practices, this guide will teach you:

  • How the FLSA defines non-exempt and exempt;
  • The difference between exempt vs. non-exempt employees;
  • For what types of non-exempt employees employers might fail to page minimum wage.
  • Non-exempt employees must be paid overtime;
  • Exempt employees wage and overtime provisions;
  • Whether exempt employees can refuse excessive overtime;
  • How to sue your employer for wage, salary, and overtime violations;

What Does Exempt and Non-exempt Mean?

The Department of Labor is the administrative agency that enforces the wage and hour laws which we will be discussing.  Before we get into the Department of Labor’s role, let’s back up and try to understand what an administrative agency does.  

The government creates administrative agencies to help manage a certain area of law.  In this case, the federal government created the Department of Labor to enforce labor laws.

Administrative agencies have fairly broad powers.  They interpret the law.  They enforce the law.  And they actually have some judicial powers.

Putting that all together, the Department of Labor is an administrative agency that has broad powers in the area of labor law.  

Wages and the Fair Labor Standards Act. Wage and Hour Division

The Fair Labor Standards Act (FLSA) is the primary labor law statute in the United States.  FLSA regulations establish that:

  • The federal minimum wage currently is set at $7.25 an hour;
  • Covered employers must pay the minimum wage to all non-exempt employees;
  • Employers must pay overtime to non-exempt employees who work over 40 hours a week;
  • The overtime requirement does not apply to exempt employees; and
  • Imposes child labor standards.


Your employer may have violated your statutory rights without you realizing it.  This violation is largely based on your classification as non-exempt vs. exempt.

Non-exempt means that you must be paid minimum wage and overtime.  Exempt means that your employer pays you a salary.

What is the Difference Between Exempt and Non-Exempt Salary?

Under the FLSA, a non-exempt employee is defined as an employee who is entitled to federal minimum wage and also must be paid overtime.  

Non-exempt employees must be paid $7.25 an hour on an hourly basis. And nonexempt employees must be paid at least minimum wage for all hours worked.  The eligibility for overtime is the primary difference between an exempt and non-exempt employee.

The FLSA does not prohibit states from passing wage and hour laws of their own.  Certain states and cities have passed laws giving workers the right to a higher minimum wage.

You might remember that Seattle made news when it passed a $15.00 minimum wage law.  At the time, Seattle’s decision to raise the minimum wage was controversial.  It also served as the centerpiece of the national debate towards higher minimum wage.

Advocates for raising the minimum wage stressed that $7.25 was not enough for someone to live.  They argued that the minimum wage should actually be seen as a living wage.

Opponents stressed that raising the minimum wage would stifle business growth.  And that small businesses could not support the higher wages.  

Fast food workers on strike for higher minimum wage and better benefits. Wage And Hour Rights.

This background remains important.  As minimum wages rise, a non exempt employee must understand that companies will likely oppose it. 

How Companies Usually Fail to Pay Overtime

Non-exempt employees normally enter a job thinking their employer must pay minimum wage.  This is mostly true.  Yet employers utilize certain exceptions to maneuver around paying $7.25 for all hours worked.

You may know some of these exceptions, but let’s walk through them.  This may still aid your decision when looking for your next — or first — job.

Tipped Employees 

This is probably the most familiar exception.  Tipped employee” means any employee engaged in an occupation in which he customarily and regularly receives more than $30 a month in tips.

“Customarily and regularly” means that the non-exempt employee interacts with customers on a decently frequent basis. 

$30 dollars in tips coupled with dealing with customers on a decently frequent basis (or non de minimis) raises an interesting question.  With the advent of fast-casual restaurants charging tips, are those workers now excluded from minimum wage protections? 

Even though employers can make non-exempt employees rely on tips rather than the minimum wage, employers must make sure that tipped non-exempt employees are paid at least the minimum wage 

Fast-casual restaurants — and restaurants in general — have switched to kiosk systems where tips are generated.  Those tips are likely pooled amongst staff.

When I eat at a fast-casual restaurant, I feel the increased need to tip.  The tip amount is prompted.  And the cashier stares you in the face while you pay. 

I’m sure I’m not the only one. 

Employers might — if they haven’t already — switched to tip-based compensation for fast-casual workers.  Of course, their total income must still come out to minimum wage.  But the pitfall is that it must come out the minimum wage each week.

You can imagine that if an employer ever chose to save this overhead, it might run into trouble under the FLSA.  

Chipotle likely can handle switching to this pay scale.  It’s likely that if they did — and this was profitable — they would be able to implement the switch without violating labor laws.

But what about your favorite local coffee shop?  Can it handle the administrative task of making sure that non-exempt employees make at least minimum wage each week? 

Unlike a traditional restaurant, these fast-casual spots are not necessarily equipped to deal with these wage issues.  

If you believe that you are not making minimum wage each week because your employer is miscalculating your tips, you likely have a case under the FLSA.

Learners, Apprentices, and Messengers: 

Currently, the FLSA authorizes employers to pay student learners only 75% of what they would pay regular, non-exempt employees.  The FLSA requires an employer hoping to capitalize on this exception to apply for a certificate. 

This exception is normally used with student learners who are learning a trade.  The law’s rationale is that the employer needs to pay the student less to obtain the necessary apprentice training.  And the student needs to learn the trade.  

Employers may find themselves in hot water if they do not obtain a certificate from the Department of Labor to hire an employee under the minimum wage.

Employers who use these exceptions must exercise caution.  Failure to comply with FLSA regulations may result in substantial penalties and damages.  

And for employees, you should take notice.  You may have economic remedies available that surpass the wages you lost.  More on that later.  

Employment-Related Workplace Discrimination 

Also, be on the lookout for workplace discrimination.  Typically, employers who try to skirt minimum wage also violate other employment laws.  

You should look out for discrimination and harassment based on:

  • Sex discrimination;
  • Sexual orientation discrimination;
  • National origin discrimination;
  • Gender identity discrimination;
  • Racial discrimination;
  • Religious discrimination;
  • Ethnicity discrimination;
  • Age discrimination;
  • Disability discrimination;
  • Marital status discrimination;
  • Pregnancy discrimination;
  • Genetic information discrimination.

Also, your employer might be violating other statutes such as:

  • The Family and Medical Leave Act (FMLA); and
  • The American with Disabilities Act (ADA).

What Does it Mean to Be an Exempt Employee?

Non-exempt employees (not receiving a salary) have a right to paid overtime.  Employees must receive overtime pay if they work more than 40 hours in a workweek.  Non-exempt employees are entitled to time-and-a-one-half after working more than 40 hours.

Also, this right to overtime applies to “white collar” workers.  If your employer pays you salary, but you do not fall within the exemption criteria, you become non-exempt.  And your employer must pay you overtime.  

Time-and-one-half pay means that you receive an additional 50% of what you normally make on top of your regular pay. 

This is a federal requirement.  Federal requirements are the floor to your rights, not the ceiling.  States can impose different overtime requirements.

This can create compliance issues within companies.  You can always Google your state’s laws.  If you state’s laws differ from federal law, you should contact a wage and hour lawyer.  Even if you suspect that it does, it still never hurts to reach out to a labor lawyer.

For example, some states require that employers pay overtime when an non-exempt employee works more than 10 hours in a single day.  This differs from federal law.  The FLSA only requires overtime after you work 40 hours in a given week.

If you are entitled to overtime, your employer must promptly pay it.  This has been interpreted as being paid out weekly.  

There are certain landmines for employers.  For example, federal law does not say exactly what an employer is required to do regarding your lunch break.

This may surprise you, but federal law does not actually require your employer to give you a lunch break.  Most employers do give you one, however.

That’s probably because most states have laws regarding lunch breaks. And other short breaks.  If you are not receiving one, there is likely some protection under the law.

This creates friction.  Let’s say you work for an upstart company with locations across the United States.  Some of those states require paid lunch and other breaks.

Your employer’s legal department may not have a robust legal team.  Younger companies often wait to start hiring major law firms to deal with these issues.

There’s a chance that you are supposed to be getting paid for these breaks.  There’s also a chance that if your employer does not count these breaks, you are actually working more than 40 hours a week.

You should always check whether you are receiving your correct wage and overtime pay.  If in doubt, we are happy to help you out. 

Exempt Employees Wage and Overtime Laws

Employees classified as exempt received a salary instead of being paid a regular rate of pay for hours worked.  You cannot just pay anyone a salary.  

They have to actually meet certain requirements for a company to classify them as exempt.   

Before an employer can decide not to pay you overtime, the employer must determine that you are exempt.

The Fair Labor Standards Act (FLSA) regulations outlines exemption status. That is, the overtime rules for employees paid a salary.

The FLSA, however, does not override state law.  That means that an individual state can have overtime provisions that provide more overtime protections.  

We will walk through a few examples of employees who employers can designate as exempt.

But first, we need to discuss the “white-collar” exemptions.  The white collar exemptions are the common reasons that an employer classify an employee as exempt.

The FLSA requires that “white-collar” employees make at least $684 (previously $455 per week) dollars a week.

This means that if you do not make this much, and you are paid a salary, you should receive overtime benefits from your employer.

In fact, you are not exempt.

Further you have to be considered an executive, administrative, or professional employee to fall within the white collar exemption.  We will talk about the common exemptions

If you are an executive, administrative, or professional employee, then you fall within the white collar exemption.

Executive employee:

An employee is considered an executive if:

  1. Primary job duties are the “management of the enterprise in which the employee is employed or of a customarily recognized department or subdivision;
  2. He/she “customarily and regularly directs the work of two or more other employees; 
  3. Suggests hiring and firing of other employees and recommends hiring, firing, advancement, promotion, or any other employee’s status change; and
  4. Make $684 per week/$35,568 per year.

"I am your boss!" Wage and Hour Rights

This is a common reason that employers are able to classify employees exempt.  Your boss normally receives a salary.

There’s some interesting points to consider.  

Primary duty means main or most important duty.  That’s the definition.  Examples include:

  • Disciplining workers;
  • Handling grievances;
  • Freedom from direct supervision;
  • Directing the work of employees;
  • Adjust work schedules and pay;
  • Providing protective gear to employees;
  • Interviewing applicants;
  • Implementing legal compliance;

A point to note is that, you or your boss can still receive exempt status if you are involved in non managerial tasks.

This mean that you do not have to stand there and hold a clipboard to be exempted.  In fact, you might have to answer your own phones, make copies, lift heavy objects, etc. and still have your employer claim your exemption.

Just because management/supervision is not your main task, does not mean you are non-exempt.

Your employer can, and likely will, still classify your as an exempt employee and give you a salary.  

Administrative Employees

Administrative employees are also exempt under the FLSA and fall within the “white-collar” exemption umbrella.  

Exempt administrative employees:

  • Primary job duties include non manual work related to the management or business operations;
  • Exert independent judgment and discretion; and 
  • Make $684 per week/$35,568 per year.

Examples of administrative employees include:

  • Human Resources
  • Payroll;
  • Benefits Manager;
  • Marketing;
  • Public Relations

Professional Employees

Your typical lawyer, account, doctor, is exempted as a professional employee.  Basically, the exemption requires only that: 1) you’re in a field that requires advanced education; or 2) the field requires some creative/artistic talent.

This exemption probably affects the widest range of people.  Those with college degrees are mostly now exempt employees.

Wage and Hour Bar Graph: Number of Degree Holders: 2000 and 2018

As you can see from the census bureau, as of 2018, college graduates have doubled in the population.

This means — as of right — employers are exempting more and more workers in the workforce. 

It’s also important to note that licenses/ certifications are not necessarily required to fall under this exception.  More and more employers are taking advantage of only having to pay employees salary.

Employers must still pay professional employees at least $684 per/$35,568 per year.

Highly Compensated Employees

If you’re lucky enough to make $107,432 in total compensation, then you liley fall within the high earners exemption:

  • You make a standard salary of $684 per/$35,568 per year;
  • You perform non manual work;
  • You customarily perform one or more job duties required of an exempt executive, professional, or  administrative, employees; and
  • Make $107,432.00 or more.


Basically, if you’re making a lot, your employer does not really need to justify your salary.  That is, it does not matter what type of work you are doing in the company.  You just have to be doing some type of work that falls within the scope of executive, administrative, or professional on a customary basis.  

Other Examples of Exempted Employees

There’s a few, amongst other, categories that I would just mention.  The below are commonly exempted professions:

  • IT professionals;
  • Outside sales representatives;
  • Inside sales representatives;


Outside sales positions differ from other types of positions classified as exempt.  There is no salary basis for
outside sales positions.

Employers are able to skirt paying outside sales representatives the minimum salary level, minimum wage, and overtime pay.

Outside sales representatives must rely on commissions, regardless of the number of hours worked.

Can Exempt Employees Refuse to Work Overtime?

You fall into an exemption.  That means that your employer can pay you salary.   

It’s true that exempt employees generally work until work is completed.  If you are at a company that does not have a full 40 hours to go around, you might come out ahead.

Actually, some studies have shown that the average worker is only productive for 3 hours a day and only can concentrate for 20 minutes at a time.  

the average worker is only productive for 3 hours a day and only can concentrate for 20 minutes at a time. Wage and Hour

During the normal 40-hour work week it’s not likely that most exempt employees are not productively working a full 40 hours per week.

To make up for this lack of productivity, employers may seize on the fact that exempt employees do not receive overtime.

Exempt employees must work until the job is completed.  You cannot refuse to work more than 40 hours in a workweek.   

Nothing in the FLSA requires employers to limit the amount of overtime employees classified as exempt work.  In large law firms, for example, lawyers notoriously work long hours.  They sometimes work 100 hours a week.  

And they work this large number of hours at their regular rate of pay.  

Further, in these high-stressed professional environments, it is not uncommon for professionals to use and abuse drugs to stay on top of work.  

Unfortunately, overwork from a salaried position likely is not an area in which you have a right to sue.  There are, however, many ways in which you can secure your wage and hour rights.

Your Right to Sue: Labor and Employment Lawyer Can Help

The Department of Labor enforces the Fair Labor Standards Act (FLSA) by investigating potential violations.   

Exempt and non exempt employees, however, may bring their own lawsuits.  

You may bring an action against your employer in state or federal court.   You end up in federal court if your employer violated a law that congress passed.  You end up in state court if your employer violated a law that your state legislature passed.  

It’s possible that your employer violated both state and federal laws.  If so, you can bring both state and federal claims at the same time.  

Your labor lawyer may advise you to combine your state wage and hour claims with your federal wage and hour claims.  You would then bring all of these claims to federal court.

You May Join a Class Action 

Wage and hour lawyers commonly certify a class and file suit on their behalf.  Class actions are lawsuits where similarly situated people sue on a common cause of action.  

For a wage and hour case, this likely means that your employer failed to pay a number of employees their right wage.  

Class actions are incredibly important in potential wage and hour cases.  Now, I hope that above keyed you in on when you might have a case.  

This, however, should make you aware of your rights.  People often give their rights away without knowing it. 

The first step of any class action is the notice phase. A plaintiff hoping to create a class action will first have to show some evidence that he  or she is similarly situated.  This means that the plaintiff must show that the prospective class members have a common claims.  

In the wage and hour context, this could be failure to pay overtime to an exempt employee.  In actuality, the labor lawyer should not have been salaried in the first place.

 Before a class action may proceed, the named plaintiff must provide potential class members. This notice can be provided by mail, email, television, radio, etc.  

You do have the power to “opt out” of a class.   This means that you have the right to decide whether you join the class.  Most people offer to opt in the class because the attorneys for the class and the named plaintiffs will do most the work going forward.

The pros of opting into a class, amongst others, are:

  • You do not have to find an attorney;
  • You do not have to go to trial;
  • You do not have to participate in the settlement process;
  • You can simply collect a check if you win


There’s also reasons, amongst others, that you may want to opt out:

  • You consider your claims more than the typical class member;
  • You want to retain a labor lawyer of your choosing;

     

If you opt into the class, you do not have much say after doing so.  The lawsuit will proceed until the case goes to trial or settles.  In class actions, the most common outcome is a settlement agreement. 

When the attorneys finally come to a settlement agreement, a notice will be sent out.  This notice will lay out terms of the settlement agreement. It will also have a provision stating that you may object to the settlement.

Any Settlement Class Member may object to the terms of the proposed settlement... Wage and Hour Objections to the Settlement

It’s important to remember that you have rights at this stage.  You can object.  But if you do not, you will lose your say in the settlement.  If there are no objections, the settlement will become binding.  This means that you will lose your opportunity to take any further action on your claim.

Binding Effect of Wage and Hour Lawsuits

The decision to opt in or out of your FLSA lawsuit is not one that should be made alone.  You can and should contact an attorney for advice.  An attorney can weight the pros and cons of opting in or going it alone.

Also, you may actually be one of the first to realize that your employer violated the FLSA.  In that case, you may end up as the lead plaintiff.

The lead or named plaintiff’s name goes at the top of the complaint.

Class Action Lawsuit

The complaint is the legal document that starts the case.   As the lead plaintiff, you may receive a larger percentage of the settlement amount based on your time spent dealing with the case.

Your Employer Will have to Make Things Right

In criminal law, when someone is found guilty the go to prison.  Wage and hour law, for the most part, is civil law.  With civil law, when someone does something wrong, they have to pay money. 

This is called damages.  

If you win, you will get the amount of money that your employer did not pay you.  This may mean wage and overtime pay improperly withheld.  

In addition, you can receive liquidated damages.  Liquidated damages are a defined amount of money that a court awards.  They are predetermined.   

Under the FLSA, you receive an equal amount of liquidated damages.  This means that you receive your unpaid wages times two.  If your employer did not pay you $10,000, you are now entitled to $20,000.

How do you Find a Good Labor Lawyer?

Finding a good labor lawyer is like finding any type of lawyer.  You should consider:

  • Referrals (friends and other lawyers);
  • Years of experience;
  • Credentials (education, past professional experience);
  • Personality – if you do not like the lawyer a jury will not either;

Specifically, for employment and labor attorneys, you should know that they focus on a lot of different areas of employment and labor law.  These include:

  • Employment discrimination, harassment, and retaliation cases;
  • Whistleblower cases;
  • Cases involving the Family and Medical Leave Act (FMLA);
  • Cases involving the Americans with Disability Act (ADA).

You might wonder whether you would want a lawyer that focuses on one area of labor and employment law.  Labor and employment attorneys are able to focus on multiple areas because these types of cases are interconnected.

It’s typical for an attorney to bring a FMLA, ADA, discrimination, harassment, and retaliation case all at one time.  

It’s also typical for a labor and employment attorney to focus just on a wage and hour issue in one case.  

Conclusion

As mentioned above, wage and hour law is more than just non-exempt vs. exempt.  Issues surface all the time.  And the law continues to change.  You should remember a few things when it comes to wage and hour issues.

Here’s some takeaways and things to remember:

  • Pay attention to whether you are making $7.25 an hour;
  • If you make tips, make sure you are making federal minimum wage and overtime (if applicable);
  • Some state statutes may provide greater protection.  For instance you may be entitled to overtime pay for over ten hours a day, your lunch break may be paid, etc.;
  • Make sure that  if you’re exempt, you make at least $684 hours a week;
  • Determine whether you fall into the definition of exempt;
  • Ensure that you receive overtime pay if you are non-exempt;
  • Understand the class action process;
  • Decide if you want to opt in or opt out;
  • Know that your final say is objecting to the settlement

The Employment Law Firm is always ready and able to help with your wage and hour issues.  We will remain transparent and provide you with sound legal advice as you navigate your wage issues.  

We operate mostly on contingency.  This means that unless we recover, you pay no fee.  Talking to a labor lawyer is cheaper than you might think.  

Do you believe that your employer has violated the FLSA?  What are you going to do about it?  We have the ability to represent plaintiffs or class action plaintiffs across the country.

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