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Overtime Questions Lead to Lawsuits

There have been many cases filed by those in the workforce that deal with the issue of overtime compensation. State and federal rules govern when overtime is to be paid, and also which categories of workers are entitled to the payments.

Two cases regarding overtime issues have recently been filed in California. The first involves employees of Franklin American Mortgage. Underwriters at the company were classified as exempt employees, which prevented them from receiving overtime pay. The employees then sued the company, alleging that they were misclassified. The second suit is a class action involving employees from several companies, including Raytheon Company, Enterprise Rent-A-Car and Ecolab. These employees allege that their employers did not have accurate record-keeping systems in place, which prevented workers from receiving their overtime wages.

The cases highlight common issues that arise for employees. For overtime purposes, employees fall into one of two categories, exempt and non-exempt. Exempt employees include those who engage in executive, administrative or professional occupations, receiving a salary for work performed. Non-exempt are generally those who perform tasks that have less responsibility, and typically receive an hourly wage.

Employees who are labeled as exempt are not entitled to overtime pay, and may file suit against the employer and claim that the company has misclassified their status. If an employer is sued for overtime wages due to misclassification, the employer must prove the employee’s classification as exempt. This issue has been the source of frequent litigation, with several companies being forced to pay overtime after being unable to prove that employees performed activities that would make them exempt from overtime compensation.

If employees are categorized as non-exempt, they are entitled to receive overtime compensation. Amounts may vary, requiring employers to pay time-and-a-half or double-time, depending upon the hours worked. While exempt employees must deal with questions of misclassification, non-exempt employees face different challenges. Some companies may miscalculate the rate of overtime pay of a non-exempt employee, meaning that the employee does not obtain all of the compensation that he or she is entitled to receive.

If you have questions about an overtime wages issue, be sure to discuss them with an experienced attorney as soon as possible. If you wait too long, you may no longer have a claim against your employer.

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