- Should I be paid overtime if I work late, or on weekends, or for more than forty hours in a week?
- What does it mean to be a misclassified employee?
- I am paid a weekly or annual salary, does that mean I am exempt from overtime?
- Who is exempt from overtime pay?
- I am paid a commission, does that make me exempt?
- What is the inside sales exemption?
- I interned for a company for free, should I have been paid?
- If I am misclassified, what am I entitled to?
- My boss says I don’t get paid overtime because I’m an Independent Contractor. Is that true?
- How do I know if I’m an Independent Contractor?
- My employer controls how I perform my work, am I really an independent contractor?
- Why does it matter if I am labeled as an Independent Contractor or an “employee?”
- If I have been improperly classified as an Independent Contractor, what can I do?
- Can my employer retaliate against me for challenging my employment status?
Should I be paid overtime if I work late, or on weekends, or for more than forty hours in a week?
You are entitled to overtime pay, either under state law or under the federal, unless you are an “exempt employee,” meaning covered by an exemption under the state or federal laws. Employers often misclassify employees as exempt in order to avoid paying overtime.
What does it mean to be a misclassified employee?
A misclassified employee is an employee who should be paid time-and-a-half for their overtime hours, but is not because their employer has incorrectly designated them as exempt from overtime.
I am paid a weekly or annual salary, does that mean I am exempt from overtime?
No. Just because you are paid a salary regardless of how many hours you work, this does not make you an exempt employee. Rather, it is the type of work you do that determines whether you are exempt from receiving overtime pay. Non-exempt salaried employees are entitled to overtime pay for every hour of overtime worked.
Who is exempt from overtime pay?
Under federal law, the primary exemptions from overtime are the following classifications: administrative and professional employees (but not clerical) – the so-called “white collar exemption”; outside salespersons; agricultural employees; employees of religious organizations; employees of seasonal camps or seasonal amusement parks; employees employed in highly-skilled computer-related operations; railway and airline employees; salesmen, partsmen and mechanics, taxicab drivers, domestic employees who work in the home. State laws differ, and often provide greater protection of overtime pay.
If you are unsure whether you have been correctly classified as exempt, please call us for a confidential consultation.
I am paid a commission, does that make me exempt?
No, merely because you are paid a commission does not mean you are not entitled to overtime pay. Instead, to be exempt you must also be an “outside salesperson” or a commissioned employee or “inside salesperson” of certain retail or service business.
What is the inside sales exemption?
The insides sales exemption applies to employees who (1) earn at least one and one half the state or federal minimum wage and (2) over half of your total pay is comprised of you commissions. Whether you are exempt as an “outside sales” employee under federal law is determined by whether you spend more than half of your work time off-site for the purpose of selling or obtaining order for products or services. State laws may differ, for example in California, to qualify for the exemption you must not only spend more than half your time outside your employer’s premises, but must spend that time doing sales or selling-related activities, as opposed to non-selling activities such as making deliveries, stocking, merchandising, installation, servicing existing customers or other activities not directly related to making sales.
I interned for a company for free, should I have been paid?
Most likely you should be paid at least the minimum wage. Many people agree to work for free as part of an unpaid internship in the hope of “getting their foot in the door” or in order to “get valuable experience.” This is illegal: Under the law a company may not suffer or permit anyone to work for them without paying at least the minimum wage. A narrow distinction applies to internships where (1) the internship is for purely educational purposes and (2) the employer is not obtaining any benefit from the internship (e.g. free labor it would otherwise have to pay for). If you completed an internship and received no benefit from it, but did work other employees did or would have done had you not been doing it for free, please call us for a free consultation.
If I am misclassified, what am I entitled to?
You are entitled to receive overtime pay for all hours worked going back as many years as the applicable statute of limitations allows (typically three to four years). Your hourly rate of pay for purposes of determining your overtime pay is usually computed by dividing your weekly salary by forty hours, and then for multiplying by 1.5 to determine the overtime rate of pay (i.e. time-and-a-half). You may also be entitled to additional amounts in the form of penalties depending on the state you work in, or whether you have been misclassified as an independent contractor (see below).
For example, if you are paid $1,000 every week, your hourly rate of pay equals $25 ($1,000 ÷ 40 hours = $25/hour). If you have been misclassified as exempt, you are entitled to be paid an additional $37.5 per hour of overtime you worked for the years covered by the statute of limitation ($25 x 1.5 = $37.50).
If you also receive a commission or bonus, generally these amounts averaged are added to your salary for determining your hourly rate of pay.
My boss says I don’t get paid overtime because I’m an Independent Contractor. Is that true?
In California, new laws provide added protection for employees who are mislabeled independent contractors. Just because you are paid by a 1099 form, by check or in cash does not make you an independent contractor. Similarly, your title alone does not determine your status. If you don’t live in California, you may still have been misclassified as an independent contractor and can recover damages.
How do I know if I’m an Independent Contractor?
There is a legal presumption that you are not an independent contractor. Your status as an independent contractor is based on your relationship with your employer. Title, method of payment, and even written agreements do not always prove that you are an independent contractor. In fact, there is no one rule that dictates your status as an independent contractor. Rather, the total set of circumstances is analyzed based on many factors.
My employer controls how I perform my work, am I really an independent contractor?
Most likely not. Your employer’s right to control the method of how the work is completed is an important factor in determining employment status. This is true even if your employer never exercises that right to control. In addition, courts and public enforcement agencies look to factors such as whether your work is essential to the existence of the employer’s business, the extent that your income depends on the financial success of the company, who is providing the tools to perform the work, where the work takes place, and whether your position with the company is long-term or more project-based.
Why does it matter if I am labeled as an Independent Contractor or an “employee?”
Independent contractors do not enjoy many of the rights afforded to employees. Independent contractors do not earn overtime, are not subject to minimum wage laws and are not protected by discrimination and retaliation laws. In addition, an employer does not deduct and pay taxes or make contributions that entitle you to benefits such as unemployment and disability insurance or even Social Security.
If I have been improperly classified as an Independent Contractor, what can I do?
If you have been mislabeled as an independent contractor, you have been denied the rights to which you are entitled as an employee. Failure to pay the proper amount of wages earned is against the law.
If you think you may have unfairly or incorrectly been designated as an independent contractor, please call us for a confidential consultation.
Can my employer retaliate against me for challenging my employment status?
It is illegal for your employer to discriminate or retaliate against you for enforcing your right to be properly classified as an employee just as it is illegal to retaliate against you for enforcing your rights to wages and benefits you are owed.