Wage and hour violations arise in a number of different contexts. Some of the most common violations include:

• Misclassifying employees as exempt — Determining whether an employee should be classified as exempt or nonexempt depends on a number of factors, including an employee’s job duties, how the employee is paid, and how much the employee is paid. Just because an employee is paid a salary or has the term “manager” in their title does not mean that the employee is automatically exempt. For more information, visit the Overtime Exemptions section of the FLSA Review. 

• Misclassifying employees as independent contractors — Whether knowingly or unknowingly, employers commonly misclassify employees as independent contractors. Doing so has significant legal ramificactions under employment and tax laws. Determining whether a worker is an employee or an independent contractor under the FLSA generally requires an assessment as to whether, as a matter of economic reality, the worker is dependent on the hiring party. For more information, visit the Independent Contractors vs. Employees section of the FLSA Review.

• Requiring employees to perform “off the clock” work — All work, as defined by applicable wage and hour laws, must be paid. When an employee performs “off the clock work”—whether that includes performing tasks before or after a shift, working through a break, or engaging in “unauthorized” work—employers may be liable for payment. For more information, visit the Hours of Work section of the FLSA Review.

• Failing to account for all commissions, bonuses, shift differentials, and other pay premiums when calculating an employee’s “regular rate” — An employee’s regular rate must account for many different forms of compensation, not just ordinary wages. When an employer fails to include all required payments when calculating the regular rate, overtime premiums are inherently miscalculated. For more information, visit the Calculating Overtime Premiums section of the FLSA Review.

• Forcing employees to share tips or failing to distribute all tips — Employees are entitled to keep all tips intended for them unless an employer operates a valid tip pool. Under a valid tip pool, an employer may require employees to share tips with other employees who customarily and regularly receive tips. When tips are shared (even in small part) with employees who do not customarily and regularly receive tips, such as dishwashers, chefs, or managers, tip pools are generally invalid and unlawful. For more information, visit the Minimum Wage Exemptions section of the FLSA Review.

• Rounding down an employee’s clock-in or clock-out times — Many employers round clock-ins and clock-outs to the nearest 5, 10, or 15 minutes to help avoid discrepancies between an employee’s scheduled shift and when the employee actually punches in or out. While rounding in a neutral manner may be permissible, rounding likely violates the law when it results in employees typically losing time due to the rounding.

• Failing to reimburse expenses or taking unlawful deductions or withholdings — Excluding legally required deductions (like payroll taxes or court-ordered garnishments), deducting or withholding any portion of an employee’s wages is typically unlawful without the employee’s express written authorization. Deductions and withholdings, as well as the failure to reimburse necessary expenses, may also be unlawful when they effectively reduce an employee’s wages below the minimum wage or the required overtime rate. For more information, visit the Deductions and Retaliation section of the FLSA Review.

• Failing to pay for travel time — While ordinary commuting time between home and work is not compensable, time spent traveling as part of an employee’s job activities typically must be paid. For more information, visit the Hours of Work section of the FLSA Review.

• Failing to pay for training time — Though there are exceptions, training time ordinarily must be paid. Employers that fail to pay for time spent training are often liable under wage and hour laws. For more information, visit the Hours of Work section of the FLSA Review.

• Failing to pay for time spent “on call” — Time spent “on call” by an employee may be compensable depending on the degree of restrictions imposed on the employee. The more restrictive the “on call” time is—for example, when severe limits are placed on an employee’s ability to travel or otherwise use their personal time freely—the more likely it is that “on call” time must be paid. For more information, visit the Hours of Work section of the FLSA Review.

• Failing to pay for waiting time — Time spent waiting for work is compensable if an employee is “engaged to wait” (as opposed to “waiting to be engaged”). This occurs when an employee is required to be somewhere and wait for work, even if the employee is not actively working. Failure to pay for time spent “engaged to wait” creates exposure under wage and hour laws. For more information, visit the Hours of Work section of the FLSA Review.

• Failing to pay for short breaks from work — Short breaks from work (e.g. coffee or snack breaks) must be paid, regardless of whether any work is performed. For more information, visit the Hours of Work section of the FLSA Review.

• Issuing “comp time” instead of paid overtime — Comp time may only be offered by public sector employers. Private sector employers who offer comp time in lieu of paid overtime violate wage and hour laws. For more information, visit the Calculating Overtime Premiums section of the FLSA Review.

• Averaging together or otherwise combining an employee’s workweeks — For purposes of determining an employee’s eligibility for overtime premiums (i.e. whether an employee worked over 40 hours), every workweek stands alone. Sometimes, however, employers average together or otherwise combine multiple workweeks to determine overtime eligibility. Doing so is unlawful and violates the FLSA.

• Failing to pay all commissions owed — Determining how much an employee is owed in commissions is sometimes complicated by the particular circumstances, such as when an employee plays some role (but not the only role) in making a sale, or when a customer that an employee brought in continues to make purchases after the employee’s employment ends. Employers risk violating wage and hour laws when they fail to comply with applicable commission agreements and policies.

• Failing to ensure that employees earn at least the minimum wage for all hours worked — While the concept of the minimum wage is straightforward enough, employers are responsible for ensuring that employees on average earn at least the minimum wage for all hours worked regardless of how they are paid, whether on an hourly, salary, commission, daily, piece-rate, or tipped basis (or some combination thereof). This requires employers to track the number of hours worked by an employee and ensure that average earnings each hour meet or exceed the minimum wage. Employers sometimes violate this mandate by subjecting employees to deductions or withholdings, or requiring employees to incur work-related expenses (for example, requiring employees to purchase their own uniform or tools), when doing so reduces an employee’s average wages below the minimum wage. For more information, visit the Minimum Wage Exemptions and the Deductions and Retaliation sections of the FLSA Review.

• Engaging in wage theft — Wage theft can take many forms, including falsifying time records, stealing an employee’s commissions or tips, withholding an employee’s final paycheck after termination, and more. Not only does wage theft create liability under wage and hour laws, but it could also give rise to other civil and criminal claims.