If you are not getting paid enough, it could be because your employer is breaking the law. This article explores three of the most common dirty (and illegal) tricks that employers use to rip off their employees.
Not Getting Paid Enough? You Might be Misclassified as Exempt.
Most employees are entitled to time and a half for hours worked over 40 in a week. These employees, who are entitled to overtime, are called “non-exempt” employees. First, let’s explain the vocabulary, because it comes up in a lot of the literature about overtime:
Exempt Employees. Exempt employees DO NOT get overtime. They are exempt from overtime laws. Most employees fall outside of this category. These employees are called …
Non-Exempt Employees. Non-Exempt employees GET OVERTIME. They are not exempt from the overtime laws, and therefore should get overtime payments.
Whether you are exempt or not depends on what you actually do. It has nothing to do with your title. Exempt status also has nothing to do with whether you are paid a salary. Generally speaking, employees are exempt if they have higher-level jobs, make enough money (over $47K starting December 2016), or perform certain kinds of specialized work.
Many employees – incorrectly – assume that because they receive a regular salary, or have a “manager” title, that they are not entitled to overtime. Unscrupulous employers exploit this misconception – just because you are paid a salary, it does not mean that you are exempt from overtime. If the duties you actually perform qualify you as a non-exempt employee, you are a non-exempt employee and are entitled to overtime compensation regardless of the fact that you are paid a regular salary (and regardless of your title).
Not Getting Paid Enough? You Might be Misclassified as an Independent Contractor
Another common misconception that employers exploit is classifying someone as an “independent contractor” rather than an employee. An independent contractor is, by definition, independent and works for him/herself. An independent contractor is not an employee.
Generally speaking, independent contractors are cheaper for employers. An employer does not have to pay overtime, taxes, unemployment insurance, workers compensation insurance, etc. for an independent contractor. Similarly, an independent contractor is afforded fewer anti-discrimination rights than an employee.
Without getting into the details, an independent contractor truly works for himself/herself. Independent contractors use their own materials, set their own prices and schedules, etc. An employee, on the other hand, uses an employer’s materials, works on the employer’s schedule and for a rate of pay set by the employer. The IRS’s website includes three questions in determining the degree of control and independence that must be examined in making an employee/independent contractor determination:
1. Behavioral: Does the company control or have the right to control what the worker does and how the worker does his or her job?
2. Financial: Are the business aspects of the worker’s job controlled by the payer? (these include things like how worker is paid, whether expenses are reimbursed, who provides tools/supplies, etc.)
3. Type of Relationship: Are there written contracts or employee type benefits (i.e. pension plan, insurance, vacation pay, etc.)? Will the relationship continue and is the work performed a key aspect of the business?
The key, as noted by the IRS, is to look at the entire relationship and consider the right to direct, control and document each of the above factors.
Not Getting Paid Enough? You Might Not Be Getting Paid for All Hours Worked.
Another dirty trick that some employers use is to simply not pay their employees for all hours worked. Even where employers classify their people as non-exempt employees, this is still a common practice that employers use in several ways. Below, we briefly detail a few of the more common techniques employers might use:
- Not paying for pre or post-shift work. You are supposed to be paid for your time worked, not based on your schedule. So if you are required to come in 15 minutes before your shift, you must be paid for that time. Similarly, if you have to stay late, you have to be paid for that time –even if it is not reflected on the schedule. With e-mail and text messages becoming increasingly commonplace in the workplace, employers often use these to communicate with employees during non-business hours and expect that the employee will not be paid for these hours either.
- Deducting “downtime.” Unless you are totally free to do whatever you want (a bona fide break), you should be getting paid for your time. But, in many jobs, there are times when there is nothing to do. That does not mean that you are off the clock and not working, rather, you are “engaged to wait” (i.e. being paid to be prepared in the event that there is something to do).
- Unlawful deductions. Most deductions, even with your approval, are illegal. Unless the deduction is for your benefit, and with your approval (e.g. insurance, pension, 401K, etc.) it is probably illegal. Some employers deduct for poor performance, broken/lost inventory, etc. This is generally illegal.
Not Getting Paid Enough? You Might Just Have a Lousy Job
Sometimes, the problem is not a legal one. Sometimes, you are just being underpaid. The solution here is the simplest of discuss (but the hardest to implement): get out there and find a better job. Easier said than done, of course, but if you have a lousy job, get out there and look for a better one.
Not Getting Paid Enough? The Bottom Line
If you are not being paid enough, consider whether you are being paid correctly. It is entirely possible that you have been misclassified as an exempt employee or independent contractor. It is also possible that you are not being paid for all of your time worked. If any of these are the case, you should contact an attorney immediately – we can help. At the same time, it is possible that you just have a bad job. Figure it out and make the call.