The Fair Labor Standards Act (FLSA) was enacted for the purpose of protecting employees so they could get the right overtime pay they are entitled to. To ensure that employers will comply with the FLSA, the US Department of Labor established the Wage and Hour Division. Unfortunately, Williams Kherkher lawyers will tell you that many businesses have been violating the law and not giving employers their overtime pay.
Companies have been using a lot of strategies in order to avoid paying overtime wage. Given its costly nature, employers will exert all effort in trying to avoid paying overtime wage. This is an illegal practice and employees who have been denied their overtime pay can file a claim with the Department of Labor. Here are some of the common strategies used by companies in avoiding overtime pay:
1. Making Workers As Salaried Employees
There is a common notion that salaried employees are exempted from overtime pay when in fact, they are not. A salaried employee needs to meet the requirements for exempt status Likewise, the salary must be more than a fixed amount per week.
In order to avoid payment of overtime, employers change the classification of an employee to independent contractor thus disqualifying them from receiving overtime pay. But if the company still has control of the time and manner of work of the employee, they cannot be considered an independent contractor.
3. Inside Sales
Compared to outside sales people, inside sales personnel spend most of their time in the office making calls or online. While they are entitled to overtime pay, companies frequently classify sales people as exempt from overtime.
4. Assign Outside Work
When an employee is assigned to do work at their home, they expect their employer to fully compensate them.
5. Comp Time
Some companies have a policy called “comp time” offered to employees who work overtime. Instead of money, employees are given time off in the future. This is an illegal tactic since the law requires employees to be paid for timed work.