SHOULD YOU BE GETTING OVERTIME PAY?
Many workers who should be getting overtime are not paid all the wages they are owed under the law. These are unpaid overtime wages, and may be obtained for workers if they have representation. Because federal and state wage and hour laws are complicated and always changing, employees often don’t know that they should be getting overtime or how overtime should be calculated.
HOW TO DETERMINE YOUR OVERTIME WAGES
In many cases, calculating overtime is straightforward. In others, where workers are paid different rates for different kinds of work, paid piece rates or may be paid according to the “fluctuating work week,” calculations may be more complicated.
Am I entitled to overtime?
There are two categories of workers who are generally not entitled to overtime: “exempt” employees and independent contractors and similar workers, discussed below.
Contrary to popular belief, it is not enough to simply receive a salary to be considered exempt. In addition to receiving a minimum wage rate, employees can only be considered exempt if their duties fall within one of the “exemptions” contained in federal and state law.
In other words, an employee must satisfy both a wage test and a duties test to properly be considered exempt.
If an employee does not satisfy one of these two tests, they cannot be classified as exempt and they are owed overtime for all hours worked. More information is provided below as a guide to give you a sense of what kinds of employees are properly classified as exempt. However, the rules are often changing due to executive orders, change in the law, and court decisions that change how the law is interpreted.
In order to receive the most accurate and up to date information specific to your situation, you should contact experienced employment attorneys who can evaluate the conditions of your employment. The attorneys at Pelton Graham LLC have years of experience pursuing claims on behalf of employees who are owed overtime due to failure to pay overtime and misclassification.
Federal law states that independent contractors are not protected by wage and hour protections. In other words, workers correctly classified as independent contractors may be paid less than minimum wage and do not need to be paid overtime. Because independent contractors may legally be paid less than employees, employers often misclassify their workers as independent contractors even though under the law they should be considered employees.
A worker cannot agree to be classified as an independent contractor. Receiving a 1099 form does not automatically mean a worker is an independent contractor. The tests for classification depend on many aspects of a worker’s duties, not on the classification made by an employer.
There is no single test or rule in place for determining whether a worker is an independent contractor. Courts look at many factors that together make up the “economic reality” of the relationship between the worker and employer. As a general matter, the more control and supervision an employer exercises over a worker and how he or she does their job, the more likely that worker is an employee.
Some of these factors include:
- How much the worker’s duties are a central part of the business
- Whether the relationship is long-term or temporary
- How much the worker invests in work expenses and equipment
- The amount of control exercised by the employer
- The worker’s opportunities for profit or loss depending on their own initiative
- Whether the worker places their services on the open market or works just for one employer
- Whether and how much the worker operates an independent business
Many states have more restrictive tests of independent contractors that may vary by industry. There are many industries where workers are commonly misclassified as independent contractors in order for the employer to save money. Just because a practice is widespread does not mean it is legal.