The following methods of payment are often used by employers to avoid paying their workers correct overtime wages.

1. Paying a fixed sum for varying amounts of overtime hours: Employees will often pay their employees a fixed sum, an amount which the employer then counts towards the employee’s overtime compensation.  Under the FLSA, any such lump sum payment that is not related to hours worked cannot be used as overtime pay.  In addition, if the fixed sum happens to be of greater value than the employee’s hourly rate of pay, then the lump sum may not be counted as overtime compensation.  In order to calculate the employee’s correct overtime rate of pay, the fixed sum payment must be factored into the employee’s other overtime wages so that the correct regular rate of pay can be determined.  Employers are obligated to pay overtime at 1.5 times the regular rate of pay.
2. Including overtime wages in a worker’s salary: The FLSA requires that employers pay overtime compensation in addition to, and not as part of, an employee’s salary.  Therefore, an employer cannot maintain that a portion of their workers’ salary includes overtime pay.
3. Paying a “bonus” that supposedly includes overtime pay: This is a similar scheme in which an employee receives a bonus and then is told by the employer that the bonus includes overtime pay.  Under the FLSA, the bonus must be tied to hours worked, or else the employer may not count it towards overtime compensation.
4. Paying a piece-rate for all time worked. This scheme is akin to paying a salary to an employee for all time worked, including time worked in excess of forty (40) hours in individual work weeks. Under the FLSA, all employees “non-exempt” from the FLSA must be paid overtime. Thus, a piece-rate worker is entitled to “piece and a half” for all time worked in excess of forty (40) hours each week.

Contact Werman Law Office, P.C. if you have been subjected to these unlawful practices.