The Truth About Unpaid Overtime For Salaried Workers

It can be frustrating to have a job title that doesn’t accurately describe what you do for the company. Sometimes, vague job titles are just the result of corporate jargon or PR euphemisms.

But there are also many instances in which employees are misclassified specifically to save the company money in unpaid overtime, and this practice is illegal. At Moreland Verrett, P.C., we regularly represent clients who have been misclassified in ways that rob them of overtime pay. Below are some of the most common types of employee misclassification:

Are You An Employee Or An Independent Contractor?

Many companies have learned that labeling regular employees as independent contractors (ICs) can save money because ICs are not entitled to overtime pay, workers’ compensation, unemployment insurance, or basic protections like minimum wage. Companies also pay less in payroll taxes for ICs than for employees, so misclassifying workers as ICs is a win-win for the employer.

Here in Texas and in many other parts of the country, it is commonly accepted and understood that if you are paid a salary, you are considered “exempt” and therefore are not entitled to overtime pay. This would seem to be such common knowledge that many people don’t question it.

But the truth is not as straightforward. While it may be the case that employers can ask salaried employees to work overtime without overtime pay, it is not true in all cases. Salaried workers who are ineligible for overtime pay are referred to as “exempt,” while salaried workers who are eligible for overtime pay are referred to as “non-exempt.”

Being A Manager In Name Only (“Exempt” Vs. “Non-Exempt Workers”)

While minimum wage laws and overtime requirements apply to most regular employees, companies are exempt from these requirements when compensating managers and certain other workers. If you have been given the title of “manager,” you may have been told that you are now exempt and will no longer receive overtime pay.

But the laws make clear that simply calling an employee a “manager” or “administrator” doesn’t make them into one. There are specific criteria that need to be met in order to deny overtime pay or other benefits to these workers. If you have been mislabeled, you may be entitled to additional compensation.

The determination of “exempt” vs. “non-exempt” is based on a number of factors, including:

• How much your salary is on a weekly basis
• Whether your actual job duties (apart from your title) are those of an actual manager/executive or those of a regular worker
• Whether your employer has a policy of docking your salary when you arrive late or leave early (such as for a doctor’s appointment)
• Whether you have supervisory responsibility over other employees
• Whether you have the power to hire and fire other employees

Lying About the Law Or Hiding Behind ‘Company Policy’

It is a persistent myth that salaried workers are not entitled to overtime pay. In addition to misclassifying some workers as managers, companies often simply say that no salaried workers are entitled to overtime, or that “company policy” forbids overtime pay (even if overtime work is expected and so performed).

This is wrong. Simply labeling an employee as “salaried” or paying that employee a salary does not automatically disqualify an employee from overtime.

Should You Be Getting Overtime Pay? Ask A Lawyer.

While the Fair Labor Standards Act and the Department of Labor provide guidance on salaried work and overtime pay, the determination isn’t always clear-cut. If you suspect that you should be receiving overtime pay as a salaried worker, please discuss your case with an experienced employment law attorney like the ones at our firm.

If an investigation reveals that your employer has been violating wage and hour laws, you could be entitled to back pay and other damages. And your employer could be subjected to greater scrutiny and legal actions on behalf of other employees.

Contact Us Today For A Free Initial Consultation

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