Unpaid Overtime and Employee Misclassification

The standard working time is 8 hours per day, translating to 40 hours each week, according to American labor law. Overtime work attracts overtime wage– OTW, and employers who subject employees to overtime work without pay set themselves up for wage and hour lawsuits.

OT wage is typically 1.5 times the usual pay rate but OT wage for the seventh day is double the regular rate. Most people consult an employment lawyer in Toronto to help them understand the different aspects of employment laws, including unpaid OT and employee misclassification.

Unpaid OT Claims

Wage and hour laws state that employees must be compensated for working beyond the standard working hours–overtime, indicated in their employment contracts. Otherwise, employees who are subjected to overtime work without consideration have two legal avenues for justice; filing unpaid OT claims or filing their grievances through the labor board. Some of the common grounds for filing an OT claim include:

  • Owing dues for weekly or monthly overtime work;
  • Overtime pay for working on the 6th and 7th days of a standard working week having 5 days. Compensation for the 6th and 7th days of a standard working week attract 1.5 and 2 times, respectively the regular hourly rate;
  • OT dues for “off the clock” work;
  • Working during lunch breaks without consideration;
  • Misclassifying some employees as “exempt employees” when they are not;
  • Misclassification of contracted employees as “independent contractors”.

Can I file a Claim for Negligible OT Dues?

The average employee will count their losses and move on when the owing OT wage in question appears insignificant or negligible from their point of view. What they forget is that an employer who denies them their rightful dues could be doing the same to your colleagues and getting away with it if no one speaks out.

The owing OT attracts interest and legal fees and the employer could be liable for liquidated damages according to FLSA Wage Statute. Employee remuneration must adhere to federal labor laws in addition to FSLA wage statutes. The owing OT may not be worth pursuing but holding your employer accountable for such violations is the first step towards eliminating workplace injustices. You could also combine resources with your colleagues and file a class action if the situation involves more than 25 employees.

Labor laws protect employees from employer retaliation for demanding their employment rights. You’re not there to provide free labor as an employee. Unjustified retaliatory acts, such as termination and demotion violate the labor statutes and the employees can file a wrongful termination & demotion lawsuit.

Employers should adhere to remuneration guidelines outlined in the labor statutes⁠, such as OT consideration, tracking the working hours, work breaks, among other things. However, some employees– exempt employees, aren’t protected by the labor law. Their (exempt employees) terms of employment aren’t subject to wage and hour laws, thus not eligible for overtime wage.

Employee Classification

There are two types of employees; exempt and non-exempt employees and consideration for OT differentiates the two. Exempt employees are exempted or aren’t entitled to OT wage as the name suggests, while non-exempt employees are entitled to OT wage. The following rules govern employee classification:

  • Employees working in management roles are considered exempt employees;
  • Employees who work in non-executive positions, oversee more than two employees, or can make independent decisions, such as hiring and firing of employees– are considered exempt employees;
  • Employees whose monthly salary is 2 times the federal minimum wage or more are considered exempt employees;
  • Permanent employees; employees who work a minimum of 40 hours in a standard working week;
  • Employees whose roles meet the exemption criteria.

Some jobs are partially exempt; meaning they’re only subject to some labor laws and not others.

Employee Misclassification

Employee classification refers to misrepresenting the employment status of a worker, where a permanent employee is classified as an independent contractor. Employers misclassify employees to reduce tax expenses because the law requires them to pay tax for permanent employees. Employee misclassification can be addressed through:

  1. Resolving the issue with the employer;
  2. Filing a misclassification lawsuit if the employer becomes adamant to your plea;
  3. Filing a wage complaint with the Division of Labor Standards Enforcement.

Resolving employee misclassification can vary with each case due to varying circumstances but it’s always wise to consult an employment lawyer for the best outcome.

Qualities of Competent Employment Lawyers

Competent lawyers must possess the following qualities:

  • Great communication skills.
  • Widely experienced.
  • Should be having a high success rate for similar cases.
  • Should be having good reviews from past clients.
  • Good customer service.
  • Should be well-versed and knowledgeable in OT wage-related laws.

Recovering your OT dues can be tricky, especially when you have to sue your employer, but the chances of succeeding in such cases are high when you have a competent employment lawyer.

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