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Common Examples of Wage and Hour Issues That Go to Court

by karin on December 26, 2017

The U.S. Department of Labor (DOL) collects about $250 million per year in back wages for American workers. These judgments come in a variety of different categories.

If you own or operate a business, it’s important to be aware of these issues and how they can affect employers. Below are some of the most common examples of wage and hour issues that go to court:

Incorrect payment of overtime wages

About 76 percent of employees who work more than 40 hours in a week either are not paid overtime or are paid overtime at an incorrect rate. In addition, according to information from the DOL, while overtime violations are only slightly more often reported than minimum wage violations, the former are much costlier. In 2014, nearly 80 percent of the back wages the DOL collected were for overtime wage violations.

Under the Fair Labor Standards Act, most employees must earn “time-and-a-half” pay if they work more than 40 hours in a week. This overtime pay may also take into consideration bonuses and commissions.

Minimum wage violations

Right there with overtime wage violations among the most common wage and hour issues are minimum wage violations.

Approximately 26 percent of workers polled in a study indicated they were being paid less than minimum wage. This is rather shocking, as this is the most basic worker’s right offered in America. Federal law requires most workers to be paid at least $7.25 an hour.

Slightly more common is the issue of tipped employees being paid lower than the minimum wage. About 30 percent of tipped workers were not paid the tipped minimum wage, according to a study by the National Employment Law Project. The tipped minimum wage is different than the standard minimum wage (often $2.13 per hour), and many states have implemented their own maximum “tip credits.” This represents the most an employer can deduct from the worker’s wages.

Failure to pay for work outside of hours

About 70 percent of employees do not get paid for the work they perform off the clock. If an employer allows an employee to work off the clock, these hours must be counted toward wages and overtime.

Illegal paycheck deductions

Roughly 41 percent of workers in the NELP study had illegal deductions withdrawn from their paychecks. Some employers, for example, deducted uniforms, tools or other work supplies. This is illegal if the deductions lead to the wages being lower than the minimum wage.

Stealing tips

About 12 percent of workers surveyed had tips stolen by their employers. Workers have a right to keep their full tip money except in tip pooling scenarios, in which tips are divided equally among employees. Even in these scenarios, employers may not take money from the pool.

To make sure your business is in complete compliance with all federal and local wage and overtime regulations, consult a trusted employment law attorney in the U.S. Virgin Islands.

Ravinder S. Nagi is Assistant Managing Attorney and Chair of the Labor & Employment Practice Group at BoltNagi, an employment and labor law firm serving businesses and organizations throughout the U.S. Virgin Islands.

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