Wages and Overtime

Minimum Wages and Tips

The Fair Labor Standards Act (“FLSA”) requires that employers pay minimum wage of $7.25 per hour. Some states and local municipalities have set higher minimum wages. 

For workers receiving $30 per month in tips, such as restaurant workers, the FLSA requires that the employer or restaurant pay at least $2.13 (this may be more depending on the State) in minimum wages. This is called the “tip credit.” However, the credit does not apply if the tips received by the worker plus the reduced minimum wage do not equal the minimum wage. Under those circumstances, the employer must make up the difference to ensure that employees are being paid $7.25 per hour.

Overtime Pay Required

If you work more than 40 hours per week and receive hourly wages (i.e. you are not a salaried employee), then your employer must pay you time and a half. 

There are certain exemptions for some employees. The Department of Labor provides a list of exemptions here. If you are not an exempt employees, then under federal law, you must be paid time and a half for overtime. A violation of the law will entitle you to double the wages owed for overtime, plus attorney’s fees and costs.

Failing to Pay Minimum Wage and Tip Pooling

Wage Disputes typically arise where an employee receiving tips is asked to perform work that does not result in tips. So, if a restaurant server is asked to come in early or stay later to clean the restaurant, the restaurant owner must pay the server the standard minimum wage of $7.25 for that time. This almost never happens. 

Tip pooling – where employees are required to pool tips and pay a percentage of the tips back to their employer – is illegal if the result is payment of wages (tips plus the reduced minimum wage) is less than the minimum hourly wage of $7.25 per hour. 

If your employer fails to pay you for overtime, pays you a tip-credit minimum wage for non-tipped work, and/or pays you less than the required minimum wage because of tip pooling or some other scheme, contact Klaproth Law for a free, confidential consultation. 

Off-the-Clock Work

Many shift workers are required to come in early or stay late, but are not paid for the time getting ready to work or getting ready to leave work. This is illegal under federal and state law.

Misclassification – Salary and Independent Contractor

The Fair Labor Standards Act requires that your employer pay time and a half to employees who work more than 40 hours per week. To get around this, employers will classify employees as salaried so they do not have to pay overtime. This is illegal under the FLSA.

If you believe you have been misclassified as a salaried employee and denied your overtime pay, you can bring a collective action on behalf of other misclassified employees.

Another way that employers try to skirt minimum wage and overtime requirements is to misclassify their employees as independent contractors. Independent contractors are freelancers or temporary employees, while employees are under the direction and control of their employers. If you are receiving a 1099, then your employer has classified you as an independent contractor. If that classification is wrong, then your employer has violated the law.

Klaproth Law has successfully litigated and settled collective actions on behalf of employees who have been misclassified.