BY: Matthew Turner | IN: Class Action & Commercial Litigation, Employment Law
It would be nice to think that if you put in the elbow grease, your boss will act in your best interest. Reality, however, can be less rosy. While employers are entitled to determine how and when to pay their workers, there are federal and state laws that regulate the payroll process and protect employees from wage and overtime abuses.
Here are five important rights that state and federal law expressly grants to employees:
Under the federal Fair Labor Standards Act (FLSA), employers must pay their workers “promptly.” Though the FLSA does not give employers a specific deadline, “prompt” payment generally means that workers should receive payment as soon as possible after the most recent pay period. Employers are not allowed to withhold any payment, or to kick back any portion of an employee’s salary. The same thing applies to overtime pay. In most cases, any overtime earned must be paid out at the same time as the regular paycheck, and an employer cannot let overtime accumulate and then pay it all at once at a later pay period.
Employees are entitled to timely payment even after quitting their job or getting laid off, and federal law mandates that they be paid by the next regular payday following the last pay period they worked.
Tipped employees – employees who earn at least $30 a month in tips – are entitled to a current federal minimum wage of $2.13 an hour in direct wages. However, if you are a tipped employee, and your direct wages and tips combined falls below the federal minimum wage of $7.25 per hour, then your employer must make up the difference. Note that many states impose a higher minimum wage than the federal law. In Michigan, the minimum wage is currently $8.15 an hour, and $3.10 an hour for tipped employees.
It is illegal for an employer to retroactively adjust an employee’s wages for poor performance. Since an employee entered into a mutual agreement to exchange labor for a fixed wage, it would be unlawful for the employer to dock wages for unsatisfactory performance. However, an employer can lawfully alter an employee’s wage going forward. Still, in such a case, the employer must let the employee know about the changes.
Further, employers are not allowed to dock an employee’s pay for short breaks. Though employers do not have to compensate employees for their lunch breaks, short breaks are categorically different. Short breaks can generally last for five to 20 minutes. Employers are not required to give short breaks, but if they do, these periods must be compensated and included in the employee’s work hours.
To collect on certain debts (such as child support, back taxes, etc.), courts have the authority to deduct monies from an employee’s wages by means of garnishment. Under the federal Consumer Credit Protection Act, an employer cannot fire workers for having their wage garnished one time, even if the employer encountered more than one levy in pursuit of collection. An employer can, however, fire an employee if their wages face a second or subsequent garnishment. Additionally, in most cases, an employee’s tips may not be garnished.
Back pay is the difference between what an employee should have been paid, and what she was actually paid, and can be the result of unpaid overtime, or a calculation error. If an employee successfully obtains a court order for back pay, then she also has the right to file a private law suit for liquidated damages, court costs, and attorney’s fees, on top of the amount in back wages.
Wage and hour abuses, unfortunately, are an all too frequent occurrence in the U.S., and workers need to understand the rights and protections that the law provides. If you suspect that your employer is not complying with state or federal paycheck laws, the attorneys in Sommers Schwartz’s Employment Litigation Group are available to discuss your situation and determine your next steps – contact us today!
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Matthew Turner is a shareholder with Sommers Schwartz, and focuses his practice on medical malpractice, legal malpractice, ERISA, and class action matters.