Wage and hour laws are designed to ensure employees are paid fairly for their time and work. Governed primarily by the federal Fair Labor Standards Act (FLSA) and supplemented by state law, these rules cover things like overtime and minimum wage payments.
Violations happen more often than you might realize. Whether you’re a business trying to avoid legal exposure or a worker seeking fair compensation, understanding wage and hour compliance is essential.
Understanding Wage and Hour Laws
Employers must navigate several important aspects of wage and hour law to remain compliant and avoid potential litigation. Key areas include:
- Minimum Wage and Overtime: Under the FLSA, non-exempt employees must be paid at least the federal minimum wage and receive overtime pay. Employees are entitled to time-and-a-half if they work more than 40 hours in a week or more than 12 hours in a day.
- Employee Classification: Properly classifying workers as employees versus independent contractors is essential. Misclassification can result in unpaid wage claims and significant penalties.
- Recordkeeping: Employers are legally obligated to keep accurate records of employee hours worked, wages paid, and related data. Incomplete or missing records can create legal exposure in the event of an audit or dispute.
Common Violations That Lead to Litigation
Despite clear legal requirements, wage and hour violations remain widespread. These actions often lead to lawsuits that can, at times, involve large groups of employees. One of the most frequent issues is unpaid overtime, where employers either fail to calculate overtime correctly or avoid paying it altogether by misclassifying employees as exempt. Another common violation is requiring or allowing employees to work off-the-clock, such as answering emails after hours or setting up before a shift without compensation.
Misclassification is also a recurring issue, especially when workers are labeled as independent contractors to avoid paying benefits. Employers may also violate the law by failing to provide required meal or rest breaks, or by automatically deducting break time from wages even when no break is taken. Each of these violations has the potential to result in costly litigation.