Many people believe that being paid a salary means you are not required to be paid at least minimum wage and overtime for working more than 40 hours in a week. This is a misconception. In addition to other requirements, for employees to be legally paid on a salary basis without any regard to overtime pay, they must fall within a substantive exemption to the federal Fair Labor Standards Act. Common exemptions are the executive, administrative and professional employee exemptions. There are many others including for highly compensated employees and people in specific jobs such as sales, computer, and agricultural jobs. Many people who believe they are properly paid on a salary basis do not actually fall within an exemption. This violation is particularly common in the restaurant industry where employees are promoted to “supervisor” but not given the types of responsibilities that would actually qualify them for payment on a salary basis.
Among many other things, an employer is required to keep track of how many hours their employees work, the rate of pay, and any deductions from payment to employees. When an employee claims to have been improperly denied overtime compensation, it is difficult for an employer who improperly classified the employee to defend the claim.
Depending on the violation, an employee may be entitled to recover unpaid overtime for two or three years. Additionally, the employee may be entitled to collect twice the amount of underpayment as well as the attorneys’ fees and costs necessary to bring a claim. Those amounts can add up quickly.