According to the US Fair Labor Standards Act (FLSA), if an employee works for more than 40 hours in one week, he or she must receive compensation for each hour of overtime worked, which indicates one and a half times normal pay. Any uncompensated hours are considered unpaid overtime. If an employer does not provide overtime pay, he or she may be liable for violating San Diego employment law.
For example, if an employee earns minimum wage working in a clothing store, which in 2012 was $8 per hour, he or she must be paid $12 for every hour she works each week exceeding 40 hours. Otherwise, her employer will be liable for violating San Diego labor law.
In California, overtime pay also applies to hours worked per day. If an employee works more than eight hours in a single day, he or she must be paid overtime. For example, if the same retail employee works a nine hour day, not including a legal unpaid meal break, she must be paid $12 for one hour of work. Otherwise, the employee can sue his or her employer for violating San Diego employment law. If an employee wins a case regarding unpaid overtime, the employer may be required to pay back wages and damages.
Keep in mind that if eligible employees agree, even in writing, to forgo overtime pay, this is illegal, and an employer can still be held liable for unpaid overtime and violating San Diego employment law.
If you find yourself on either side of this situation, talk to a San Diego labor lawyer about your options regarding unpaid overtime, and what you stand to gain or lose through a court or the Labor Commissioner.
Employment law has previously come down hard on several major employers for unpaid overtime. Significant lawsuits that have resulted favorable for the employee include cases against IBM, AstraZeneca, Merrill Lynch, Wal-Mart, Eli Lilly, Morgan Stanley, Abbott Laboratories, and Starbucks.
Employees who have successfully sued their employers for unpaid overtime come from many income brackets and employment sectors, from service-level employees to individuals holding white-collar positions. As the economy shifts, San Diego labor law violations regarding unpaid overtime are increasing, as companies seek to save money by assigning more hours to current employees instead of hiring new workers, and by misclassifying certain workers as exempt from overtime pay.
If you are an employee who suspects you are a victim of unpaid overtime, you will require the services of a San Diego labor lawyer, with a thorough understanding of FLSA and San Diego employment law to negotiate your case.
Similarly, employers who feel they are being wrongly accused of withholding overtime pay should seek legal counsel from a skilled employment lawyer, in order to avoid the potential of facing substantial penalties.
Employees Guaranteed Overtime Pay
Certain employees are inarguably entitled to overtime pay, regardless of agreements the employer may establish with workers. Some of the employees guaranteed overtime pay include:
- Police officers
- Fire fighters
- Manual laborers whose duties require strenuous or repetitive motion
Failing to provide overtime pay for workers in these categories, among others, constitutes a violation of San Diego labor law. If you are a worker within any of these categories who has worked unpaid overtime, or an employer who is being wrongfully charged with denying overtime pay to workers within these categories, contact your choice of experienced San Diego employment lawyer.
Employees Exempt from Overtime Pay
San Diego labor law concerning unpaid overtime applies to employees in almost all sectors. However, some employees are considered exempt. Exempt employees are not entitled to overtime payment, while non-exempt employees are. According to FLSA Section 12(a)(1) and Section 13(a)(17), exempt employees include certain workers at the administrative, executive, and professional level, as well as certain sales employees. Several factors determine whether employees in these categories are actually exempt from receiving overtime pay.
First, any employee who is exempt from overtime compensation must be paid by salary, and must earn a minimum of a certain amount each week, which is usually close to or above $500. Otherwise, an employer may be violating San Diego labor law by denying overtime pay. Your San Diego employment lawyer will be familiar with current salary requirements for overtime-exempt employees.
Administrative employees who are exempt from receiving overtime pay must maintain the following responsibilities:
- Aiding an executive employee
- Undertaking tasks that require special skills and training
- Training or educating other employees
- Performing managerial work, instead of manual labor
- Exercising authority over operation of the workplace
Sales employees who are exempt from receiving overtime pay must maintain the following responsibilities:
- Selling products or services on the road, or away from the workplace operated by the employer
Executive employees who are exempt from receiving overtime pay must maintain the following responsibilities:
- Managing other employees, including supervising at least two full-time staff members
- Being able to fire and hire
- Exercising other forms of managerial authority
Professional employees who are exempt from receiving overtime pay must maintain the following responsibilities:
- Working as an artist or in some way performing creative services
- Providing educational services that require specialized training
- Performing work that requires specific education and skills
- Performing work related to computers and technology that requires specialized skills and education
Professional, managerial, executive, and sales employees must spend a maximum of 20% of work time on tasks outside of the duties described above to be considered exempt, otherwise they may be due unpaid overtime. Professional, managerial, executive, and sales employees must spend a maximum of 40% of work time on tasks outside of the duties listed if they work in retail or service-oriented businesses.
Employers and workers alike should keep in mind that in California, just because a worker is a part-time employee, receives a salary, manages other workers, or makes more than $100,000 a year, these factors do not automatically make that individual exempt from overtime pay.
These guidelines for determining whether an employee is exempt from receiving overtime are not extensive. Employees who do not receive overtime pay but feel they have been misclassified as exempt, as well as employers who need to defend themselves from an employee regarding unpaid overtime, should consult a San Diego labor lawyer to fully understand this complicated field.
Misclassification of Employees as Exempt from Overtime
Misclassification of employees as exempt from overtime pay is rampant. Employers can misclassify employees as exempt, therein violating San Diego labor law, either accidentally or intentionally, since the guidelines listed in the previous section can be misinterpreted.
If an employee is misclassified as an independent contractor receiving a 1099, he or she may be eligible for back wages for unpaid overtime if an employer is charged with violating San Diego employment law. Talk to your San Diego labor lawyer, who will understand the nuances of the FLSA in defining exempt or non-exempt employees, to determine your status, or the status of your employees.
Employees who are commonly misclassified as exempt from overtime pay include:
- Employees of pharmaceutical companies, especially representatives. These individuals are not exempt from overtime pay because they do not actively make sales, and therefore do not fall in the exempt category that includes certain types of salespeople.
- Workers within the financial sector, such as consultants and loan officers. These individuals are not exempt from receiving overtime compensation because financial work is not considered part of the category of sales. Instead, these workers are viewed as producers for their employers, and must therefore be compensated for working overtime.
Classifying employees within either of these categories as exempt from receiving overtime is a violation of San Diego labor law.
If you believe you have been misclassified as exempt and have worked unpaid overtime, consult an experienced San Diego employment lawyer, who will understand current requirements for exemption. If you are an employer who is being sued by an employee who believes he or she is entitled to overtime pay, a skilled San Diego labor lawyer may be able to demonstrate that you were correct in classifying a certain worker as exempt.
Penalties for Unpaid Overtime: Employers in Violation of San Diego Labor Law
An employer faces severe penalties if charged with violating San Diego labor law and denying a non-exempt worker overtime pay. An employer can be penalized by a trial court or the Labor Commissioner. Penalties and restitution can vary depending on how long the employee was denied overtime compensation, and whether the employer willingly misclassified the employee, or made an honest mistake. A San Diego employment lawyer can help determine what an employee stands to gain in a lawsuit concerning unpaid overtime, and what an employer stands to lose.
The amount of money an employer is likely to have to pay an employee if charged with violating San Diego labor law by withholding overtime compensation is determined in part by the following factors:
- Whether an employer knew an employee was misclassified as exempt
- How many overtime hours an employee worked
- How much an employee earned each hour, or each pay period
Willfully unpaid overtime carries much more significant consequences than accidentally unpaid overtime. However, both offenses can and will be punished. to avoid paying legal fees, back wages, interest, and other penalties, it is essential for employers to consult a San Diego labor lawyer before classifying employees as exempt.
An employee cannot necessarily collect unpaid overtime in the form of back wages for the entire time he or she worked for a particular employer. If a San Diego labor lawyer can prove that the employer did not knowingly misclassify an employee as exempt, the employee can only collect back wages on unpaid overtime for the past two years. This time frame is called a statute of limitations. However, if a San Diego employment lawyer demonstrates that an employer willfully misclassified a worker as exempt, the employee can collect unpaid overtime on a three year statue of limitations. The court may double wages owed to the employee as damages if the violation of San Diego employment law was intentional.
In 2007, the Supreme Court of California tried a case in which an employee was denied overtime (Murchy v. Kenneth Cole Productions, Inc.). The employee earned back wages, interest on back wages, and waiting time penalties. Waiting time penalties are owed when an employer does not immediately pay an employee all wages and compensation owed when the employee quits or is released. A San Diego labor lawyer defending an employee may leverage California Labor Code 201 and 203 and demand waiting time penalties when an employee is fired without being compensated for overtime or given all wages owed, such as reimbursement for business expenses.
When an employee wins a case, he or she is also likely to be entitled to attorney fees if the employer is charged with violating San Diego labor law. Any employer facing these charges should consult a San Diego employment lawyer to determine what is at stake, taking into consideration back wages, waiting time penalties, interest, attorney’s fees for the employee, and any other form of compensation owed. A skilled San Diego labor lawyer may be able to settle for a reduced amount, or get the case dismissed entirely.
Keep in mind that regardless of whether misclassification occurred intentionally or by accident, a court will likely require an employer to cover all legal fees incurred by a misclassified worker if he or she wins the case. An employer will most likely not be able to collect legal fees from the employee, even if the employer is absolved of charges.
If an ex-employee waits too long after leaving a job to file a suit against an employer who has violated San Diego labor law by withholding overtime payment, he or she may no longer have a case. The employee may also be able to collect only a portion of back wages. Workers who have undergone willful denial of overtime payment can collect back wages for three years retroactively, beginning the date the suit is filed. Therefore, if you wait one year to file a suit, you can only collect unpaid overtime compensation for two years, even if your San Diego employment lawyer successfully proves your employer intentionally misclassified you as exempt.
Similarly, workers who were accidentally classified as exempt can collect compensation for two years retroactively, beginning with the date the suit is filed. If you wait one year to file a suit and your San Diego labor lawyer proves you were accidentally misclassified, you can only collect one year’s worth of back wages. If you wait two years, you will most likely not be able to file a suit. If you are a worker who has been unjustly denied overtime compensation, do not hesitate to contact a San Diego employment attorney.