Is your salary too low to exempt you from overtime wages?

On Behalf of | Jun 8, 2023 | Wage And Hour Claims |

Given that overtime pay costs a company at least 150% of someone’s typical hourly wage, employers are often eager to avoid paying overtime wages whenever possible. Some companies even misrepresent the situation to their workers in the hopes of avoiding overtime pay applications. Wage theft related to overtime pay runs rampant, in part because employees don’t fully understand their rights.

One common trick is to pay someone on a salary basis and then require many hours of extra work each week. This seems legal, but it may be a thinly-veiled attempt at exploitation. What many workers don’t realize is that not all salaries are exempt from overtime pay.

Low salaries may still lead to overtime wage rights

It would be very easy for companies to abuse a salary compensation system, and some organizations actively attempt to do so. They promote someone to management and then force them to work so many hours that their hourly wage drops close to the federal minimum. For a company to use salary pay as a legitimate reason to not pay overtime, the annual wages of the worker need to be at least $35,568. That is approximately $684 per week before tax. Workers who make less than that may realize that they have performed uncompensated overtime for years and may have a sizable wage claim.

The law protects the rights of workers to reasonable pay

It is not fair or appropriate for companies to steal wages from their workers. Provided that there is evidence of the overtime shifts worked and documentation of how little someone actually makes, a worker not paid overtime could potentially take their employer to court and seek compensation for all of their unpaid overtime thus far.

Sometimes, workers even band together and pursue a lawsuit collectively, as such claims can have more of an impact on a company, thereby (potentially) forcing it to change its practices. Realizing that an employer may have unfairly denied someone overtime wages is often the first step toward correcting that wage theft.

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