• Oct 24, 2023
  • Wage & Hour

Employer Penalty For Not Paying Overtime

Employer Penalty For Not Paying Overtime

Does an employer have to pay overtime? In most circumstances, employers are legally required through the Fair Labor Standards Act (FLSA) to provide overtime pay to eligible employees. Overtime pay is typically mandated by federal and state labor laws to ensure that employees are fairly compensated for working longer, overtime hours. Here are the key aspects to receiving overtime pay:

  1. Eligibility for Overtime: Those who require overtime pay are usually nonexempt employees who work more than a certain number of hours in a workday, workweek, or pay period. Eligibility could change by jurisdiction, but in California, the standard is typically any time worked beyond 40 hours in a workweek.
  2. Overtime Rate: Overtime pay is typically calculated at a rate of one and a half times the employee’s regular rate of pay. In some cases, employees may be entitled to double time (twice their regular rate of pay) for working excessive hours.
  3. Exemptions: Some types of employees do not qualify for overtime compensation because of their job duties, salary level, or employment status. Common exemptions include executive, administrative, and professional employees, as well as certain categories of salaried employees. It’s important for a salaried employee, in particular, to have a conversation with their employer to find out if they are eligible for an overtime premium.
  4. State Overtime Laws: In addition to federal laws, many states have their own overtime hour laws and regulations. Employers must comply with both federal and state overtime rules, and they usually have to pay employees the higher rate of overtime pay when there is a conflict between the two.
  5. Penalties for Non-Compliance: Failure to pay overtime pay to eligible employees can result in penalties and legal consequences for employers. Employees working overtime who are not paid for their additional hours in accordance with state laws can file a lawsuit for recovering backpay wages, damages, interest on unpaid wages, and legal fees. It’s important to consult with an employment law attorney for more information.
  6. Record Keeping: Employers are required to maintain accurate time and payroll records to track overtime work for employees and their work hours. These records are subject to inspection by labor enforcement agencies.

Both employers and employees should be aware of and understand overtime rules and requirements in their state. If a minimum wage or salary basis employee believe they are not receiving the extra hours of overtime pay they are entitled to, they can consult with an employment lawyer (like the ones at Lawyers for Justice, PC), keep records of their hours worked, and, if necessary, seek legal advice or file a complaint with a labor enforcement agency.

Employer Penalty For Not Paying Overtime Hours

Employers who fail to follow overtime law and pay eligible employees for the extra hours an employee works may be subject to penalties, including legal action. The specific penalties for not paying overtime can vary based on the jurisdiction and the nature of the violation. The following are some common consequences and penalties for employers who do not pay overtime as required:

  1. Overtime Back Pay: Employers may be required to pay employees the overtime wages they were entitled to but did not receive. This typically includes the difference between the regular rate of pay and the overtime rate for hours worked.
  2. Damages: Employees may be entitled to damages, which can be equal to the amount of overtime pay they did not receive. Damages serve as compensation for the employee’s losses due to the employer’s failure to provide paid overtime.
  3. Interest on Unpaid Wages: Employers may be required to pay interest on unpaid overtime wages, calculated from the date the wages should have been paid.
  4. Attorney’s Fees and Legal Costs: If an employee takes legal action and wins their overtime pay dispute, the employer may be responsible for paying the employee’s attorney’s fees and legal costs.
  5. Criminal Penalties: In cases of severe wage theft, knowing violations of overtime regulations, or fraud, employers could face criminal penalties, including fines and potential prison time, although it’s pretty rare.
  6. Additional Fines and Penalties: Some states have their own specific wage and hour laws and regulations, which may include additional fines and penalties for non-compliance.

It’s important for employers to comply with both federal overtime law and state overtime laws.

Part Time Overtime Hours

In California, part-time employees are entitled to overtime pay under the same conditions as full-time employees. Under the Fair Labor Standards Act, the state has specific rules that govern when overtime pay is required, regardless of whether an employee is part-time or full-time.

Overtime Rules in California

Daily Overtime:

  • Over 8 Hours in a Day: Employees must be paid at 1.5 times their regular rate of pay (which is at least minimum wage) for any total hours worked over 8 in a single workday.
  • Over 12 Hours in a Day: Employees must be paid at double their regular rate of pay for any hours worked over 12 in a single workday.

Weekly Overtime:

  • Over 40 Hours in a Week: Employees must be paid at 1.5 times their regular rate of pay for any hours worked over 40 in a workweek.

Specifics for Part-Time Employees

  • Part-Time Definition: In California, part-time employees are generally those who work fewer than 40 hours per week. However, the same overtime rules apply regardless of the number of hours an employee is scheduled to work.
  • Eligibility: Part-time employees are eligible for overtime pay based on the hours they work in a day or week, similar to full-time employees.

Example Scenarios

  1. Daily Overtime:
    • If a part-time employee works two 6-hour shifts and one 10-hour shift in a week, then the 10-hour shift would include 2 hours of overtime pay at 1.5 times the regular rate for the 9th and 10th hours.
  2. Weekly Overtime:
    • If a part-time employee works five 9-hour shifts in a week, then they would work 45 hours in the week, with 5 hours of overtime pay at 1.5 times the regular rate for the hours worked over 40.
  3. Seventh Consecutive Day:
    • If a part-time employee works every day for a week, with 6-hour shifts each day on the seventh consecutive day, the first 8 hours would be at 1.5 times the regular rate, even if each shift is only 6 hours, because it is the seventh consecutive day.

In California, part-time employees are entitled to overtime pay under the same conditions as full-time employees. This includes daily overtime for hours worked over 8 in a day, weekly overtime for hours worked over 40 in a week, and specific rules for the seventh consecutive day of work. Employers must ensure compliance with these regulations to avoid legal issues and ensure fair compensation for all employees.

Is It Illegal Not To Pay Overtime – FAQ

does an employer have to pay an employee overtime? In most circumstances, employers are legally required through the Fair Labor Standards Act (FLSA) to provide overtime pay to professional employees who are entitled to overtime pay.

is it illegal not to pay overtime? Yes, California law requires that employers pay overtime, whether authorized or not, at the rate of one and one-half times the employee’s regular rate of pay for all hours worked in excess of eight up to and including 12 hours in any workday, and for the first eight hours of work on the seventh consecutive day of work.

how do companies get away with not paying overtime? Sometimes to skirt state overtime law, an employer will misclassify an employee as an independent contractor. Exempt employees and independent contractors are not entitled to be paid overtime.

how does overtime work in a two week pay period? An employee may work only 80 hours in a pay period but still be eligible for overtime. If the employee works 45 hours in one week, but only 35 the following week (which is a total 80 in the pay period), they would still be entitled to 5 hours of overtime for the 5 extra hours worked in the first week.

what is an employer penalty for not paying overtime? For any initial violation the penalty is one hundred dollars ($100) for each failure to pay each employee. For each subsequent violation or any willful or intentional violation the penalty is two hundred dollars ($200) for each failure to pay each employee, plus 25% of the amount of wages unlawfully withheld. The California Department of Industrial Relations has more information here.

can an employer adjust your hours to avoid overtime? An employer cannot adjust previously worked hours to avoid paying nonexempt employees overtime. If an employee worked 45 hours one week and then 35 hours the next, their employer cannot adjust hours to make both of those work weeks 40 hours.

what’s considered overtime? Eligibility could change by jurisdiction, but in California, the standard is typically any time worked beyond 40 hours in a workweek.

how much is double time pay? It is quite literally “double an employee’s pay.” So if their salary is $25 per hour, double time pay would equate to $50 per hour.

when is double time paid? Under California double time laws, an employer must pay an employee twice their regular pay rate if the employee works more than 12 hours in a workday or more than eight hours on the seventh consecutive day of work in a workweek.

is overtime always time and a half? California law requires that employers pay overtime, whether authorized or not, at the rate of one and one-half times the employee’s regular rate of pay for all hours worked in excess of eight up to and including 12 hours in any workday, and for the first eight hours of work on the seventh consecutive day of work.

when does double overtime start? When an employee works more than 12 hours in a workday or more than eight hours on the seventh consecutive day of work in a workweek.

paid time and a half meaning? It’s called time and a half pay because it’s equivalent to an employee’s hourly rate multiplied by 1.5 per hour of overtime. So if an employee’s salary is $25 per hour, their time and a half pay would equate to $37.50 per hour.

can you get paid overtime on salary? A salaried employee must be paid overtime unless they meet the test for exempt status as defined by federal and state laws, or unless they are specifically exempted from overtime by the provisions of the California Labor Code. Salary basis employees should always ask their employer about the overtime rules they fall under.

can i sue my employer for not paying me overtime? If you think your overtime laws were violated and you were not paid sufficient overtime pay, reach out to an attorney at Lawyers for Justice, PC so they can point you in the right direction. Call (818) JUSTICE for a FREE CONSULTATION today.

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