Can Companies Get Away with Not Paying Overtime?

Misclassification of employees is a critical issue that infringes on workers' rights and can lead to significant financial losses. When employers incorrectly categorize employees as exempt from overtime pay or as independent contractors, they fail to compensate those employees for the extra hours they have worked.

If you are not being paid overtime because of employee misclassification, you can take action to hold your employer accountable. In this blog, we will discuss what overtime pay is, laws concerning overtime wages, and what to do if you are owed overtime wages.

What Are Overtime Wages?

Overtime wages refer to the extra money an employee earns for working beyond their regular hours. This concept is in place to compensate employees for putting in additional effort and time at work. Typically, overtime kicks in after an employee has worked a certain number of hours in a day or week, depending on the specific regulations in their region.

In the United States, employees who work beyond their regular schedule of 40 hours per week are owed compensation at a higher pay rate, commonly referred to as "time-and-a-half." This policy indicates that overtime pay is a legally integral component of employment, intended to compensate workers for added work.

The exact rules for overtime wages can vary by state, so it's essential to consult local employment laws for accurate information. Employers must adhere to these laws to ensure fair compensation.

Minimum Wage & Overtime Laws in Florida and Illinois

Florida does not have its own state-specific overtime laws; instead, it follows the federal Fair Labor Standards Act (FLSA). Illinois has overtime laws that mirror the FLSA laws.

Under the FLSA, non-exempt employees are entitled to overtime pay for hours worked over 40 in a single workweek. Overtime pay is calculated at a rate of one and a half times the employee’s regular hourly rate.

For some workers who earn a bonus or commission as part of their compensation, their regular hourly rate must be calculated each week to include any additional moneys earned by the employee.

For instance, if a call center employee earns $15 an hour plus $10 for each lead or closed sale they make, and that employee makes 10 sales in 1 week, then their weekly pay for that week would calculated as 40 hours x $15/hr = $600 PLUS 10 x $10/lead = $100. Their total pay that week would be $700.

When determining overtime pay, the regular hourly rate would be adjusted to include the additional $100 earned. For that specific week, the employee’s regular hourly rate would become $17.50 (total compensation of $700 divided by 40 hours), instead of $15/hr, because of the bonus pay for the 10 leads/sales. Any hours worked OVER 40 should be paid at a rate of $26.25/hr (1.5 x $17.50) as opposed to $22.50/hr (1.5 x $15.00).

Who Is Eligible for Overtime Pay?

Employee misclassification can take several forms, including labeling employees as independent contractors instead of employees, or classifying them as exempt from overtime pay even though they do not meet the criteria for exemption. Misclassification can have serious consequences for employees who do not receive the wages they are entitled to under the law.

In general, employees who are covered by the FLSA are eligible for overtime pay. However, certain employees may be exempt from overtime requirements based on their job duties, salary level, and other factors.

Overtime Exemptions in Florida and Illinois

Some employees are exempt from overtime pay under the FLSA, including:

• Executive, administrative, and professional employees who meet the salary and duties tests established by the FLSA.
• Highly compensated employees that earn at least $107,432 per year.
• Outside salespersons who primarily work away from their employer's place of business.
• Certain computer professionals who meet specific salary and duties criteria.
• Employees in specific industries, such as agricultural workers, seasonal amusement or recreational workers, and certain transportation workers.

It is important to note that independent contractors also fall outside of the employees who are eligible for overtime wages. In many cases, employees who are not being paid overtime wages have been misclassified as independent contractors by their employers. There are guidelines that must be met to be considered a true independent contractor. Often, workers are misclassified because they do not meet the legal criteria as independent contractors and should therefore be treated as employees and collecting their proper overtime wages.

To ensure that your employer is accurately calculating and paying any owed overtime pay according to the FLSA, consider the following steps:

• Keep accurate records of your hours worked, including any time spent on meal breaks, office meetings, and “off-the-clock” work.
• Maintain all paystub records including bonus or commission pay.

What to Do If Your Employer Fails to Pay Overtime Wages

If you believe that your employer is not paying you the proper amount of overtime or is misclassifying you as exempt, discuss your concerns with your employer. Should your employer fail to address your concerns, consider consulting with an employment attorney or contacting the U.S. Department of Labor's Wage and Hour Division for assistance.

Failure to Pay Because of Employee Misclassification

If you have been misclassified as an exempt employee, to claim your overtime wages, you may wish to file an overtime class action or collective action lawsuit with an employment lawyer. Class and collective action lawsuits are powerful tools for employees to seek justice when they have been wronged by a company or organization. By joining together, individuals can hold employers accountable for their unlawful actions and ensure that their rights are protected under the law.

These suits allow a group of people with similar legal issues to join together and pursue a lawsuit collectively. Class and collective action lawsuits are especially useful in cases involving employee misclassification as exempt from overtime pay.

Recent Florida Overtime Collective Action Suit

In March 2022, as a proposed collective action lawsuit, a driver for a FedEx contractor filed suit for unpaid overtime wages. The plaintiff says she worked for TCR as a nonexempt, hourly delivery driver from April 2020 to February 2022. TCR is a logistics company that provides delivery services for FedEx to residential and commercial customers, according to the suit.

The plaintiff claims she would regularly work six days a week for the company. In a regular week, she clocked about 64 hours. Despite this, she says, she was only paid for eight hours worked each day. The plaintiff filed a collective action lawsuit to represent herself and all other TCR drivers who she says are not overtime exempt but were treated as such. She said they did not have a supervisory role over any other drivers, did not make any managerial decisions of importance and were not required to possess any advanced training for the job — conditions that might otherwise qualify a worker as exempt from overtime pay, according to the suit.

The plaintiffs are seeking back pay for unpaid overtime wages, liquidated damages equal to twice the amount of unpaid wages, and attorney’s fees and costs associated with bringing the suit.

Reach Out to Our Rockford, IL Attorneys

By pursuing legal remedies, employees can recover unpaid wages, damages, and even penalties against the employer. Working with an experienced employment lawyer empowers individuals to better understand their rights and navigate the complex legal landscape.

If your overtime rights have been violated, USA Employment Lawyers can help you understand your legal rights and options. Together, we can stand up against unlawful business practices and ensure that hardworking employees receive the compensation they rightfully deserve.

To schedule a free case consultation, call (800) 483-0998 today. Se habla español.