Employers who Pay Straight Time for Overtime Hours Violate Federal Law

Some employers insist on paying non-exempt employees overtime wages – wages for hours worked over 40 hours in a workweek — at straight time instead of at time and one-half. Such unlawful practices may entitle affected employees to their unpaid back wages plus additional payments known as liquidated damages. This type of violation is commonly seen in many industries including the home care, service, and food/restaurant industries. Employers have also been caught paying hours over 40 in straight-time cash instead of overtime wages at time and one-half, which is also a violation of the law. 

Employers are required to include all qualified remuneration, actual monies paid, by the employee when calculating an employee’s overtime rate. Non-discretionary bonuses, commissions, awards for performance on the job (such as money for great attendance, highest production, quality of work, etc.) and other forms of payment must be factored when determining the correct overtime rate. Workers are deprived of earned compensation when employers fail to account for these types of earnings when calculating overtime. This is because the employee’s overtime rate is determined by dividing the total remuneration for employment (except statutory exclusions) in any workweek by the total number of hours actually worked in that workweek, and multiplying by 1.5.