With so many unique job roles and employment practices in businesses, it can be difficult to discern whether some payment protocols adhere to state and/or federal law. Wage abuse is a common occurrence in the workplace, and employers and workers would benefit from understanding some of the common situations in which intentional or unintentional wage abuse might occur. The following are the top five employee wage abuses that occur in companies across the country.

1. Misclassification of exempt employees

An employee can be classified as either “exempt” or “non-exempt.” An exempt employee is not entitled to overtime pay as guaranteed by the Fair Labor Standards Act (FLSA), whereas a non-exempt employee is entitled to overtime pay. According to the FLSA, the three main categories of exempt workers are: executive, professional and administrative. These categories are quite broad, and encompass many types of jobs. However, it is the type of actual work done that determines an employee’s classification, not their job title alone.

Misclassification of employees is the most common problem in the workplace resulting in wage abuse by employers. When an employee is misclassified, he or she may be entitled to lost wages for overtime hours. Some employers may classify an employee as exempt because their wage is higher than market averages or because they perform important work. However, these are not valid factors to be used for classifying workers, and employers should instead perform a careful analysis of actual and regular job duties before making the determination. It would also be beneficial for employers to conduct a vulnerability audit of all exempt positions to ensure compliance with the FLSA and state laws.

2. Misclassification of independent contractors

Another major problem many workers face is that of being misclassified as an independent contractor rather than an employee. While employees are entitled to critical benefits and protections such as minimum wage, overtime pay, paid sick leave, unemployment insurance, and safe workplaces, independent contractors are not. If a worker is misclassified, then they are being denied access to such benefits.

There are a few key differences between an independent contractor and an employee. According to the Internal Revenue Service(IRS), an independent contractor is a worker whose work is not controlled by an employer. In other words, their payer does not control what will be done or how it will be done. Independent contractors are generally self-employed and work without an employee-employer relationship. They also perform work that is not central or integral to the core goals of the company under which they are employed. Usually, companies that use independent contractors to perform core business duties are targets of employee misclassification investigations. The Department of Labor (DOL), state agencies and tax authorities are currently prioritizing the enforcement of proper employee classification.

3. Preliminary and postliminary activities

The time spent performing preparatory duties for a job is not usually compensable under FLSA standards, unless those activities are an essential and indispensable part of an employee’s job or made mandatory by the employer. Some activities, such as preparing or cleaning a workstation, putting on and taking off protective gear, or other activities necessary for preparing to work, are considered compensable if they are deemed essential to the job. The time spent performing these activities must be carefully reported so that employees can be fairly compensated. One challenge that employers and companies must address is record-keeping, so that time spent on time spent logging in to work terminals, traveling, or other essential duties can be properly reported.

4. Controlled on-call time

When a worker arrives at their worksite and begins working, they are entitled to compensation for that time. However, when a person is on-call, it can become less straightforward to determine what time is compensable. Payment becomes dependent on how restricted the time becomes for a worker on call. If a worker can use the time spent waiting to be called as personal free time, then that time is not likely to be compensable. However, if there are too many restrictions over how that time can be spent or where they can go during that time, then the worker may be entitled to compensation. For example, if a worker is required by their employer to stay at the workplace while on call, then the worker must be paid for that time. Courts interpret the law differently depending on one’s area, but a few key questions are considered when determining whether on-call time is compensable: Where can you go while on call? What can you do while on call? How often are you called? What do you have to do when you are called? While new technologies can help track staffing needs, these systems must be carefully monitored to ensure proper treatment of on-call claims.

5. Improper deductions from exempt employee salaries

An exempt employee is entitled to their full salary payment, without deductions, for any number of days or hours worked during a workweek. Deductions from pay can be made for full-day absences taken by an employee for personal reasons, rather than for sickness or disability. Deductions can also be made for absences of one or more full days due to illness or disability if the employee is part of a bona fide plan, policy or practice of providing compensation for salary lost due to illness. If an employee receives payment for jury duty, witness fees or military duty pay, an employer can usually offset that amount through deductions.

Improper deductions are not allowed deductions in pay by the employer. An employer cannot legally deduct from an employee’s pay if the deductions result in an amount below state or federal minimum wage. Deductions cannot be made for partial day absences, except those that occur in the first or final week of an exempt employee’s employment or for unpaid leave under the Family and Medical Leave Act. Other examples of when deductions are not allowed can be found at the Department of Labor’s website.

If you believe you are being unjustly denied payment or benefits by your employer, you should contact an experienced employment attorney at Strong Advocates. We can assist you in determining your rights and legal options. We are committed to helping you get the justice you deserve.