Many companies fail to properly pay employees as required by law. One recent study by UCLA estimated that more than one quarter of all low-wage employees are not paid the full minimum wage.[i] Another way companies often violate the law is refusing to pay overtime to employees they call “managers.” For example, a restaurant might call some of its workers “kitchen managers” and refuse to pay overtime even though they do not supervise two or more full-time employees or play any role in managing the business. This is ILLEGAL. In order to be “exempt” from overtime, the employee must perform “exempt” job function and be paid on a salary basis.

            But even when the employee performs exempt duties, the company must pay the employee on a salary basis. To be paid on a salary basis, the employee must receive “a predetermined amount that is not subject to reduction because of variations in the quality or quantity or work performed.” Although the law allows a company to deduct when a salaried employee misses a full day of work under some circumstances, the company cannot pay the employee for a half-day of work or dock the pay of a salaried employee in any way on a day where an employee performs any work at all. If the company does this enough, it destroys the exemption and the company has to pay overtime. Other examples of improper deductions include:

  • A deduction of a day's pay because the employer was closed due to inclement weather;
  • A deduction of three days pay because the exempt employee was absent for jury duty;
  • A deduction for a two-day absence due to a minor illness when the employer does not have a bona fide sick leave plan, policy or practice of providing wage replacement benefits; and
  • A deduction for a partial day absence to attend a parent-teacher conference.

            With modern technology, most true managers are on call 24 hours a day, 7 days a week. A manager is often working – such as by reading and responding to emails by Smartphone – even when they are out of the office. If a company is docking a manager’s pay, because the manager works out of the office, it may be jeopardizing the exemption. The employee may be entitled to recover that lost pay.

            The law makes it illegal to retaliate against employees who file good-faith complaints. If you think your boss is cheating you out of the pay you deserve, give us a call.

 

 

[i] http://labor.ucla.edu/publications/reports/brokenlaws.pdf