How Employers Commonly Short-Change Workers on Overtime Pay

In these days of understaffed workplaces, it’s becoming more and more common for employees to work well over the regular full-time schedule of 40 hours per week. Under state and federal law, certain workers are entitled to be paid one-and-a-half times their regular rate of pay for any hour worked over 40 in a single week. This is known as overtime pay. If your paycheck is not reflecting the overtime hours you are working, you can hold your employer accountable for back pay.

Your employer might not have intentionally withheld overtime pay from you, but unless you know what you are entitled to better than they do, you could be missing out on hundreds of dollars a month in hard-earned compensation. Learn about your rights and consult New Jersey wage and hour attorney Frank Steinberg if you have questions.

Who Is Eligible for Overtime Pay?

Generally speaking, employees who are classified as executives or professionals are exempt from the overtime pay requirement. Exempt employees are almost always paid on a salary basis and must earn more than $684 per week (as of 2021). Almost all workers who are paid an hourly wage are non-exempt, meaning they must be paid overtime when they work more than 40 hours in a week. It’s that simple. If you earn an hourly wage or earn a salary wage of less than $35,568 per year, your employer must pay you time-and-a-half for any hour worked over 40 in a week.

How Do Employers Short-Change Workers?

Obviously, overtime pay costs companies a lot of money, and many employers do everything they can to prevent their employees from working over 40 hours in a week. However, other companies allow or even require their employers to exceed 40 hours and don’t pay them what the law requires. Some ways employers short-change workers out of overtime—whether intentionally or not—include the following:

• Basing overtime on pay periods rather than weeks. Most people are not paid on a weekly basis. Rather, they are paid every two or four weeks. Employers might assume--mistakenly or knowingly—that as long as your average hours don’t exceed 40 per week, you don’t have to be paid overtime. However, the law is based on the 7-day workweek. For example, if an employee works 80 hours in a two-week pay period, split 40-40, she just gets regular pay. But, if she works the same 80 hours in a two-week pay period, but works 80 in week one and zero in week two, then she must be paid for 40 hours at the regular rate and 40 hours at time-and-a-half.
• Exempting all salaried workers. There is a misconception that anyone who earns a salary is ineligible for overtime pay. The truth is that if your salary is $684 per week or less, you are entitled to overtime pay at a pro-rated rate for hours worked over 40. Because the salary limit increased significantly recently, some employers may be unaware of the law. As of January 1, 2020, the rate increased from $455 per week to $684.
• Misclassifying employees. Another exempt group of workers are independent contractors. If you are classified as a contractor, you are not entitled to overtime, no matter how many hours you work in a week. However, in order to be classified as an independent contractor, you must meet certain criteria, and many employers misclassify workers in order to save money on overtime, benefits, and employment taxes.
• Expecting off-hours duties. Employers cannot expect you to put on a uniform, prep your station, answer emails, be “on-call,” work through lunch, clock out before you are done working, or not track your hours at all. These minutes can add up to significant losses of overtime pay.

An employer oversight or an occasional underpayment might not warrant legal action, but if you are regularly working more than 40 hours in a week and are not being paid time-and-a-half, you should talk to a lawyer.

What About Working From Home?

Thousands of employees are still working remotely in the midst of the Covid-19 pandemic, and many of these workers are non-exempt. So how do you log overtime when you are working from home? It is essential that you communicate with your employer about how you are going to track your hours. Generally speaking, however, if your job required overtime hours before you switched to remote, your employer should expect that to continue.

Talk to an Employment Lawyer If You Have Questions

If you are a full-time hourly employee in New Jersey, it’s likely that you are working overtime at least some of the time. Are you getting paid what you are owed? Wage & hour attorney Frank Steinberg can tell you if you are or not. Contact our office in Somerville to get started.