Pay Violations in the Construction Industry

The construction industry is booming. That means that construction workers—who already work very hard—are working longer hours. But the industry commonly deprives its workers the overtime compensation to which they are legally entitled. Here are some common ways construction companies violate federal law by underpaying their workers:

Day Rate Pay with No Overtime:

Under this scheme, the company pays its workers a flat day rate without any overtime.

Therefore, even if the employee works far more than forty hours in a week, they only get paid the day rate multiplied by the number of days worked.

This payment scheme typically results in a dramatic underpayment of overtime wages.

Driving Time:

Some employers pay their workers only for the time they spend on the job site.

But travel time between job sites or from the job site to and from the employer’s yard or shop is generally compensable.

Generally speaking, once you started performing your work for the day—for example, by picking up equipment or supplies at the employer’s yard or shop—your travel time is compensable until you complete your work for the day.

Off-the-Clock Violations:

We hear all too often about supervisors and managers who pressure their workers to work while off-the-clock.

If you are performing work for your employer, you are entitled to compensation, even if your supervisor has encouraged you no to report the time.


Employees who receive extra pay-like production or incentive bonuses, hiring bonuses, attendance bonuses, or shift bonuses or premiums-are typically entitled to a higher overtime rate than a simple “time and a half” of their regular hourly pay calculation.

The only bonus payments that can be excluded are truly discretionary payments/bonuses. Discretionary bonuses are the ones that surprise you when you get them.

To be excluded from the overtime rate calculation, the employer must have sole discretion on both (1) whether to make the payment; and (2) the amount of the payment.

If you receive a non-discretionary bonus, that amount probably should be included in your hourly rate of pay before the company calculates your overtime compensation.

Unreasonably High Per Diems:

A large per diem might seem like a good thing. On the surface it is—it means you are getting money in your pocket.

But companies sometimes utilize high per diems to pay you less in overtime wages. They do this by shifting your compensation from your hourly rate to your per diem. They then calculate the overtime rate only on your (now smaller) hourly rate, ignoring the per diem completely.

Per diems that are based on the number of hours you worked or per diems that are higher than you need for your daily expenses are generally considered compensation.

This means that when your employer calculates your overtime rate of pay, they need to include some or all of the per diem in that calculation, thereby increasing your overtime rate.

Improperly Designating Employees as Independent Contractor:

Generally speaking, true independent contractors are not entitled to overtime.

But just because the company designates you as an independent contractor does not make you one.

Similarly, it doesn’t matter what your agreement with the company says, even if you agreed to be paid as an independent contractor.

To be a true independent contractor, you must meet a variety of factors which—generally speaking—determine if you are in business for yourself or if you are more like an employee.

If you are working as an independent contractor, but your company controls how you do the work, where you do the work, when you do the work, and provides the tools and equipment to do the work, you are likely misclassified and are actually entitled to overtime pay on top of what you are already paid.

Learn More About Your Rights In A Free Consultation

Your specific entitlement to overtime compensation will depend on many factors such as your position and actual job duties within the company. Your job title does not determine whether or not you are entitled to overtime pay. The best way to understand your rights and legal options is to discuss your case with an experienced employment law attorney.

Learn More About Your Rights In A Free Consultation

Your specific compensation will depend on factors such as your position within the company and whether that title is justified by the work you actually do. The best way to understand your rights and legal options is to discuss your case with an experienced employment law attorney.

Moreland Verrett, P.C., serves clients in the Austin area and throughout Texas. We are pleased to offer free initial consultations to all prospective clients. To discuss your case for free with an experienced employment lawyer, call us at 512-782-0567 You can also send us an email.