U.S. Department Of Labor Wage And Hour Division Phone Number Ways Employers Avoid Paying Overtime

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Ways Employers Avoid Paying Overtime

The U.S. Department of Labor’s Wage and Hour Division receives numerous complaints every year from employees who were wrongfully denied overtime pay. While some employers violate federal overtime law without intention, others purposefully deny overtime pay to eligible workers. By using common overtime scams, employers cheat their workers out of time-and-a-half compensation for overtime hours. Luckily, many common overtime scams have been identified so that workers can fully understand their rights to overtime.

A common overtime scam, working “off the clock” occurs when an employer forces an employee to work without being clocked in. For instance, an employer may instruct a worker to clock out and remain on the premises to complete the tasks they should have finished during the day. In another example, an employer may require their employees to work on the weekends without being clocked in. In general, workers can identify and avoid this common overtime scam by understanding that time spent working for an employer should be considered as hours worked for the purpose of calculating overtime pay, regardless of whether the employer wants the worker “on the clock.”

Employee misclassification is another common overtime scam. Misclassification occurs when an employer intentionally misclassifies a worker into an exempt category; they trick the worker into thinking that their job title makes them ineligible for overtime pay. However, federal overtime law states that an employee’s job duties, not their job title, is the main factor in determining who can receive overtime pay.

For instance, employee misclassification commonly occurs when an employer labels a worker as an “independent contractor” to avoid paying overtime. However, if the worker does not meet the test for determining independent contractors, they may be eligible to collect overtime pay for hours worked in excess of 40 in a single workweek. Another common example of employee misclassification is labeling workers as “managers” without allowing these employees the opportunity to perform any managerial duties.

Paying straight time instead of time-and-a-half compensation is another common overtime scam. Federal overtime law states that non-exempt employees should be paid 1.5 times their regular rate when working more than 40 hours in a single workweek. For instance, if an employee is usually paid $8 per hour, they should receive $12 for every hour of overtime. Paying non-exempt workers less than 1.5 times their regular rate for overtime hours is a violation of overtime law.

These are the most common forms of overtime scams. Other scams include short-changing hours (not including short breaks in an employee’s total hours worked) and providing “comp” time instead of overtime pay. By informing yourself on the basics of overtime law, you can help ensure you do not fall victim to an overtime scam.

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