The Fair Labor Standards Act (FLSA) establishes minimum wage, overtime pay, and youth employment standards. The FLSA establishes a federal minimum wage of $7.25 per hour and requires overtime pay at a rate not less than 1.5 times the regular rate of pay after 40 hours of work in a workweek for covered nonexempt workers. Many states also have minimum wage laws and where a worker is subject to both federal and state minimum wage laws, the employee is entitled to the higher minimum wage.
Bona fide administrative, executive, professional, and outside sales employees are exempted from minimum wage and overtime pay under Section 13(a)(1) of the FLSA. However, a job title does not exempt an employee from those provisions. Instead employees must meet certain tests regarding their job duties and receive a salary of at least $455 per week ($23,600 per year). President Obama drew attention to the low salary standard in a 2014 Presidential Memorandum directing the Department of Labor to update the minimum wage and overtime standards. Effective December 1, 2016, the standard salary level will increase to $913 per week and will automatically update every three years to reflect economic changes.
Many employees are often unaware of minimum wage and overtime pay laws until it is too late. Generally, under the FLSA an employee cannot recover back pay more than two years after it is due to him. However, if the employer willfully violates the FLSA, an employee has three years to assert his claim. To file a complaint under the FLSA, contact the U.S. Department of Labor’s Wage and Hour Division.
Last year, the Department of Labor (DOL) recovered nearly $247 million in back wages for more than 240,000 workers. Since 2009, the DOL has recovered nearly $1.6 billion in back wages for 1.7 million workers. These amounts are just a fraction of the amount owed to workers because of wage theft (employers not paying workers the amount they have legally and rightfully earned), according to Catherine Rampell, an opinion columnist at The Washington Post.
In July, the DOL ordered a private company that had been hired to run the U.S. Senate cafeteria to pay 674 cafeteria workers $1,008,302 in back wages after the DOL discovered that the company misclassified employees, underpaid employees for the time they worked, and failed to pay required health and welfare benefits since 2010.
Congress, as a whole, has taken little to no action to combat wage theft. In March 2016, Senators Patty Murray and Sherrod Brown and Representative Rosa DeLauro introduced the Wage Theft Prevention and Wage Recovery Act to Congress. The bill would require employers to pay full wages owed to an employee, and would also impose civil penalties on employers for violating the Fair Labor Standards Act. The bill does not have a good chance of being passed into law.
If you have questions or concerns about whether you are being paid properly and for all the hours you work, contact the U.S. Department of Labor’s Wage and Hour Division at 1-866-487-9243. If you work in North Carolina, you can also contact the North Carolina Department of Labor’s Wage and Hour Bureau at 1-800-625-2267.
The U.S. Department of Labor has recovered more than $1 million in back wages and liquidated damages for 196 employees of Bowlin Group LLC and Bowlin Services LLC out of Ohio and Kentucky. Bowlin Services installed cable for Insight Communications, a cable, telephone and Internet provider in Kentucky. The defendants misclassified 77 employees as independent contractors and violated the Fair Labor Standards Act (FLSA) by denying these workers access to critical benefits, including minimum wage, overtime, family and medical leave, unemployment insurance, workers’ compensation and failing to maintain accurate payroll records.
Misclassifying employees negatively impacts our economy, generating losses to the U.S. Treasury, Social Security and Medicare funds, state unemployment insurance, and state workers’ compensation funds. It also leads to unfair competition because businesses that play by the rules are at a disadvantage.
This problem has become so acute in Tennessee that last month the legislature passed Senate Bill 833, which has been signed into law and imposes penalties on construction companies for misclassifying workers in an attempt to evade workers’ compensation premiums. A Tennessee study in 2012 revealed losses of up to $91.6 million in workers’ compensation premiums. North Carolina has identified the problem but has yet to take any action. Until states aggressively prosecute misclassification, this fraud will continue.