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Hourly Pay and Straight Time for Overtime – Red Flag. Almost Always Illegal

As illustrated by a recent settlement that exceeded $400,000 by a group of convenience stores in New York’s Hudson Valley, one of the most blatant violations of the Federal and New York overtime pay laws is still happening and is a more common form of wage theft than most realize. The message to workers is – protect your rights and do not miss out on the overtime pay you are legally entitled to. If you are paid hourly with no overtime premium, make sure it is legal and that you are not the victim of wage theft. 

In this particular case, cashiers at the stores routinely worked between 60 and 84 hours per week, however, the employer paid them straight-time rates for all of their hours, with no overtime when they worked more than  40 hours per workweek.  

In a similar case, albeit in a completely different industry – oil field services, diesel mechanics working in the Texas oil fields were paid hourly straight time rather than overtime at time-and-one-half their regular rates of pay for those hours. This wage violation resulted in the workers receiving a settlement of almost $140,000.  

Another straight time for overtime scheme used by employers with multiple locations (particularly convenience stores and restaurants) is to have employees work less than 40 hours per week at several different locations – keeping separate time records for each location and issuing separate pay checks from each location, or sometimes paying for the overtime hours in cash. While the employee ends up working well over 40 hours in total across the different locations, they are only paid straight time for the hours worked because they did not work more than 40 at any one location.

For example: An employee works 8 hours per day for 3 days at location A of a fast food franchise and 8 hours per day for 3 days at location B of a fast food franchise during the same workweek. All locations are commonly owned, operated and/or controlled. Legally, all of the hours should be combined and the employee should be paid for 24 + 24 = 48 total hours, of which 8 should be overtime. Instead, they are paid for 24 straight time hours at each location on 2 separate pay checks. Assuming an hourly rate of $15, they are being paid $720 for the week instead of the $780 they are legally entitled to. Over time, this difference in pay adds up to thousands of dollars per year.

 Paying straight time for overtime hours (eg paying a worker the same hourly rate for all hours worked, including hours over 40 per week) is rarely permitted outside of certain computer related employees who earn at least $27.63 per hour, and is still surprisingly common among retail, energy, construction, manufacturing, restaurant and healthcare workers, as well as those employed through staffing companies.    

Need Help Determining If You Should be Receiving Overtime Pay? 

Although compliance with the wage and labor laws is technically the sole obligation of the employer, these cases highlight how important it is for workers to familiarize themselves with federal and state wage laws to protect their fair pay rights. There is a lot of money at stake on this issue and you should seek guidance from an overtime pay lawyer if you have any doubt as to compliance. 

If you have questions or believe that you have been the victim of wage theft due to an improper straight time for overtime pay scheme, contact us for a free and confidential review of your situation.