4 Common & Expensive Wage & Hour Violations

images(This post was written by Rick Dacri, April 1, 2014)

McDonald’s is being investigated by state and federal authorities for alleged wage and hour violations. Specifically, allegations include forcing workers to clock out during times when the restaurants are slow, preventing workers from taking breaks, and failing to pay overtime. This case comes after similar claims were alleged against WalMart.

Big companies become big targets and generate front-page headlines. Yet, these practices are not confided to only these firms. All employers should be monitoring their pay practices, particularly those of supervisors, to minimize infractions and the resulting penalties. Too often I hear of budget conscious supervisors who implement operating practices, particularly “no overtime rules,” without fully understanding that hourly paid, nonexempt workers must be paid for all hours worked.

Here a 4 frequent wage and hour errors:

  1. Failing to pay for all time spent working. Hourly, non-exempt employees must be paid for all hours worked. This includes their actual time working, short rest breaks (not the 30 minute unpaid lunch breaks mandated under most state laws); time spent travelling on business (there are extensive rules around this); on-call time (when the employee is required to remain on company premises, or so close he or she cannot use the time effectively for his or her own purposes); and training time (unless the training is outside normal hours, is voluntary, is not job related, and no other work is performed). In addition, time spent running a quick errand on the way to or from work must be compensated and time spent checking and responding to email while at home, is also compensable.
  2. Permitting “off the clock” work. Employers are not permitted to ask or require a non-exempt employee to work “off the clock.” If an employee starts early or stays late, the time must be paid, even if an employee works overtime without prior authorization.
  3. Failing to pay for compensable breaks. As I pointed out above, you don’t have to pay workers for meal breaks that are at least 30 minutes long, but they must be completely relieved from work. If an employee is called back early, they must be paid. Also, some time and attendance systems automatically deduct time for meal breaks, even when employees perform duties. Finally, rest breaks of 5-20 minutes are compensable.
  4. Improperly computing overtime. Overtime is calculated at 1.5 times the regular rate of pay. The rate of pay includes shift differentials, nondiscretionary bonuses, commissions, on-call pay and other incentive payments.

There are many potential wage and hour errors, too numerous to list here. The regulations are complicated and the penalties are steep. Train your manager on the state and federal requirements. Regularly review all your pay practices.

And if you have questions or need some help, give me a call on the HR HELPLINE.

If this post was helpful, you may want to read these other posts:

  1. Off the Clock Work: Must I Pay?
  2. FLSA: Changes in law Means Employers Pay More
  3. Exempt Employees: Can You Dock Pay For Illness?




Filed under Compensation, Compliance

4 responses to “4 Common & Expensive Wage & Hour Violations

  1. Pingback: Body Odor: It’s a Problem Supervisors Must Address | Uncomplicating Management

  2. Pingback: LinkedIn Gets Burned with Overtime Violations | Uncomplicating Management

  3. Pingback: Must You Pay Employees For “On Call” Time? | Uncomplicating Management

  4. Pingback: Compensation Trends and Pitfalls: What You Must Know and Do | Uncomplicating Management

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