Not Getting Paid for Hours Worked Laws

Not getting paid for hours worked laws provide that employers must abide by the Fair Labor Standards Act (FLSA) to ensure that all employees are paid for those hours worked. Many states have their own state laws regarding overtime pay, but the FLSA sets the minimum standard. States may also provide additional financial compensation to employees above the FLSA if they choose to do so.

When an employee is not paid or is underpaid for time worked, it is called “wage theft” according to the U.S. Department of Labor’s (DOL) Wage and Hour Division (WHD).

There are many businesses that hire only exempt employees so that they don’t have to pay employees for additional hours worked on the typical 40 hour workweek. 

However, if an employee is, in fact, hired as a nonexempt employee, then they must be paid for all hours worked; in particular, any hours worked over 40 hours will require overtime financial compensation of 1.5 times the employee’s hourly pay. For those who are paid a salary but are still nonexempt, the salary will be calculated to ensure that the hourly pay X1.5 is paid to the employee.

Overtime pay is a hotly contested issue, with new bills being introduced but never adopted, so be sure to check your state’s laws as well as the FLSA for what you may be owed. 

Exempt vs. Nonexempt Employees

Exempt employees receive an annual salary without the ability to receive overtime pay. Exempt employees, even if they work on a federal holiday (i.e., New Year's Day, Christmas, Presidents Day, etc.), are not eligible for additional compensation. However, if the exempt employee is forced to work on a federal holiday, then the employer faces the risk of having the exempt employee’s status automatically changed to nonexempt.

Exempt employees are often eligible for company benefits, such healthcare, 401k and 401k matching, paid time off, and more.

Nonexempt employees are paid at an hourly rate. Iif a nonexempt employee works more than 40 hours/week, they must be paid overtime for that additional time worked. 

Under the FLSA, the amount to be paid is 1.5 times the employee’s hourly rate. 

Therefore, if the employee generally makes $8/hour and works 45 hours in one week, the employee will be paid for the additional five hours at a rate of $12/hour for a total of $380 (40x8 + 5*12). 

Keep in mind that if a nonexempt employee works on a federal holiday, the employer need not pay the employee additional compensation for working that holiday, unless the employee works over 40 hours during that same week. That being said, most companies do, in fact, pay overtime for holidays worked because this incentivizes some employees to work when they otherwise may not have.

Differences Between Exempt and Non-Exempt Employees and Pay

There are several other important key items for employers and employees to keep in mind regarding pay, including overtime pay, including the following:

  • Employers are required to pay employees for training conducted on the job. Therefore, even if the employee is “shadowing” another employee or engaging in computer e-learning courses, that time must be paid to the employee. Hourly nonexempt employees are most often paid their hourly rate.
  • In certain industries, employers must pay the employee for time spent driving to and from work. This applies to, but is not limited to, police officers, EMTs, and other similar types of positions.
  • If you are “on-call” and are called into work on a weekend, you must be paid for your time spent working over the weekend.
  • Some positions can earn overtime pay for any hours worked in excess of eight hours/day, even if that means you still only work 40 hours/week. This includes school officials.
  • Some industries have different overtime rules depending on the position. This includes hospitals, police officers, and firefighters.

Unpaid Wages, Bonuses, and Commissions

The Wage and Hour Division of the U.S. Department of Labor sets the federal minimum wage rate. 

As of 2023, the federal minimum wage is $7.25 per hour. This number has not changed since 2009. The only change that has been made to this is a 2014 Executive Order from then-President Obama stating that minimum wage for workers on new federal contracts must be at minimum $10.10 per hour.

Many states, however, have passed laws that raise their state required minimum wage. As of the end of 2022, the lowest being $9.95 per hour in Montana and the highest being Washington State at $15.74 per hour.

Unpaid Wages

Can an employer not pay you for hours worked? The answer is no.

Employers are required to pay employees, in a timely manner, all wages owed regardless of employment status, namely exempt or nonexempt. It is illegal to not pay employees on time, though only if it is purposeful and not because of an issue like the payroll company making a mistake.

Any unpaid wages that are not paid are considered “wage theft” and the employer is at risk of litigation should an employee choose to sue. Wage theft laws dictate that all employees must be paid on a reasonable timeline for their time worked.

The only additional requirement here is that if an employer wishes to have the employee bear the cost of a cash register shortage, the deduction cannot be taken from the employee’s pay if that would result in pay below the minimum wage. The employer also may not reduce the employee’s overtime compensation.

Bonus Pay

While most employees believe they are entitled to bonus pay for a job well done over the year, bonuses are not a requirement under the FLSA. Note that bonuses are different from a merit pay increase, which is an increase to an exempt employee’s base salary or a non-exempt employee’s base rate.

However, employees can file a complaint if the employee’s employment contract otherwise states that the employee will receive a bonus on an annual basis. Sending the employer written notice of the complaint should be the first course of action, though if the employer refuses to honor the contract then a legal claim can be brought.

Such a complaint will generally be brought in small claims court if the amount is under a certain threshold. Further, employees usually do not need to hire an attorney for this type of case, as most courts will rule that the employee is entitled to a bonus so long as the contract indicates as such.

Commissions

The FLSA also does not require commissions to be paid to employees working in a position that may receive commissions at another company. 

However, if payment on commission is stated in the employee’s contract, then the employee can go down the same avenue as previously mentioned for those entitled to a bonus. 

Before having the courts involved, employees should draft a letter to their employer evidencing that the employment contract indicates that they are entitled to either a bonus or commission. If the employer still fails to rectify the problem, then employees can communicate to their employer that they will be bringing a lawsuit in small claims court.

If the employer still fails to fix the problem, then the employee should move forward with the suit.

Company Bankruptcy

If your employer goes bankrupt, you may still have a claim for unpaid salary, wages, or commissions. 

In bankruptcy proceedings, priority exists for unpaid wages that are owed to the employee, up to $4,000 earned within 90 days before the company files for bankruptcy. Such wages include salary, commissions, bonus, vacation and sick pay, and severance pay.

This does mean that wages owed that exceed $4,000 in the previous 90 days are not given priority and are at risk of not being paid.

FLSA Rules for Overtime in 2023

As of 2022, the FLSA stated that nonexempt employees must be paid for overtime. They stated:

“Covered nonexempt employees must receive overtime pay for hours worked over 40 per workweek (any fixed and regularly recurring period of 168 hours – seven consecutive 24-hour periods) at a rate not less than time and one-half the regular rate of pay”.

In May 2023, the new proposed regulation will be published.

Need Help With Not Getting Paid For Hours Worked Laws?

If you need help learning more about the laws associated with not getting paid for work, and your rights and responsibilities as an employer or employee, you can post your legal need on UpCounsel’s marketplace. UpCounsel accepts only the top 5 percent of lawyers to its site. Lawyers on UpCounsel come from law schools such as Harvard Law and Yale Law and average 14 years of legal experience, including work with or on behalf of companies like Google, Menlo Ventures, and Airbnb.