Utah Wage Law Explained

If you believe you’ve been deprived of the compensation to which you’re legally entitled, please contact the Lore Law Firm. Our overtime rights lawyers represent Utah employees who have been subjected to workplace wage and hour violations and take cases on a contingent fee basis – no fee if no recovery of backpay.

Understanding Utah Wage and Overtime Laws

While Utah does have certain state labor laws that differ from the federal Fair Labor Standards Act (FLSA), the state law applies only in instances where it provides greater rights or protections than federal law.  Whichever law (state or federal) is more favorable to the worker will apply.

Minimum Wage

The current Utah and federal minimum wage is $7.25 per hour.  While attempts have been made to raise minimum wage to $12 per hour, no increase is currently anticipated as of 2020.

Overtime Pay

Utah state labor laws on overtime pay generally apply the FLSA and require employers to pay time and a-half for all hours worked over 40 per workweek, unless an employee is properly classified as exempt. For minimum wage workers in Utah, the overtime pay rate amounts to $10.88 per hour (1.5 x $7.25). An employer doesn’t violate overtime laws by requiring employees to work overtime, (ie “mandatory overtime”), as long as they are properly compensated at the premium rate required by law. When determining which hours count towards the calculation of overtime pay, Utah labor law requires that all “hours employed” be counted.  Such hours include all time that an employee is: 1) Working 2) On the employer’s premises ready to work 3) On duty 4) At a prescribed work place 5) Attending a meeting or training or 6) Taking an established rest or break period excluding meal periods of 30 minutes or more where the employee is relieved of all responsibilities. Utah labor laws do not require reporting pay or show-up pay when workers show up for a scheduled shift but are sent home due to no available work.

When Overtime Doesn’t Apply

Most workers in Utah are entitled to overtime pay when they work more than 40 hours per week. In certain circumstances, however, there are exceptions. Employees engaged in executive, administrative, or professional capacities (and paid at least $455 per week on a salary basis) are exempt from the overtime requirement. Note that new minimum salary requirements for these overtime exemptions take effect in January 2020 and increase the minimum salary threshold to $684 per week (or $35,568 annually). This change in federal law will also apply to most workers in Utah when making the determination of whether they are classified as exempt or non-exempt from the overtime pay laws.

Misclassification of Independent Contractors

While there are situations in which workers are legitimately running their own business and properly treated as independent contractors who are not entitled to receive overtime, employers are not allowed to mischaracterize employee roles to avoid paying overtime compensation. Merely labeling a worker as an independent contractor, or even entering into a written agreement, is not enough to avoid the labor laws on overtime pay.  While there is no single definition of “independent contractor” in Utah labor laws. There are several factors to be considered in determining if a worker in Utah is an employee or independent contractor (a/k/a 1099 employee) If properly classified as an independent contractor under Utah law, workers are typically eligible for only the specific compensation bargained for in a contract.

Tipped Workers

Employers may not share in or keep any portion of a gratuity that a patron gives to an employee. An employer may credit the tips received by tipped employees against the minimum wage obligation if the employer pays at least $2.13 per hour to the employee and tips are: 1) Received by the employee 2) Reported to the employer and 3) At least $30.00 per month. Every employer using the tip credit must also inform employees at hiring (or before implementation) of any tip pooling or sharing arrangement and count the tips in the payroll period in which the tip is earned in calculating the minimum wage.

Payroll Deductions

Utah labor laws do not permit employers to deduct any amounts from an employee’s wages unless:
  • The employer is required to do so by court order or state or federal law.
  • The employee authorizes the deduction in writing.
  • The employer withholds wages according to an approved retirement plan.
  • A deduction to cover health, welfare, or pension contributions is authorized by a wage or collective bargaining agreement.
An employer may not otherwise require an employee to rebate, refund, offset, or return part of the employee’s wage, salary, or compensation.

Vacation, Sick or Holiday Leave

Utah doesn’t require employers to provide workers with paid or unpaid vacation leave. Many employers choose to provide vacation leave as part of a benefits packages to attract employees, however. In these situations, employers may set the policies, terms and conditions as to how and when such a benefit is used – including “use it or lose it” policies that state that terminating employees forfeit accrued but unused vacation time. However, any such policy must be clearly communicated to employees through handbooks or other published policies.  In the absence of such policies, vacation leave, holiday leave, sick leave, and any other paid time off are treated as wages and due on termination from employment.

Statute of Limitations

Utah’s deadline for filing an overtime claim adheres to the FLSA, which requires those seeking to recover unpaid back overtime wages file a lawsuit within two years from the date of the employer’s wage violation. So a lawsuit filed today would be able to seek recovery of back overtime for only the prior 2 (sometimes 3) years. As an example, suppose you believe that your employer has failed to pay you proper overtime wages since January 1, 2016. Waiting until June 1, 2019, to file your lawsuit means you are only allowed to seek unpaid wages from June 1, 2017, to June 1, 2019. The statute of limitations may be extended to three years if an employer’s violation of the FLSA was willful. An FLSA violation is deemed willful if the employer knew that its conduct was prohibited by the FLSA or showed reckless disregard.

Penalties for Violations

Under federal law, employers who fail to pay proper overtime wages may be liable for up to double the amount of unpaid back wages plus costs and attorney’s fees incurred by employees. These cases can be brought overtime pay lawyers on a class or collective basis on behalf of all workers who were subjected to the same illegal pay practices. Under Utah wage payment laws, the consequences to employers may include a misdemeanor charge and a penalty of 5% of the unpaid wages owing to the employee. This penalty may be assessed daily for a maximum of 20 days. Willful failure to pay wages within 24 hours of a written request may result in a penalty of up to 60 days’ wages.

Lore Law Firm is On Your Side

At the Lore Law Firm, we represent salaried, hourly, and day-rate workers in an array of employment litigation matters, including unpaid overtime compensation claims in Utah. Our attorneys, and the Utah overtime law attorneys we associate with, are passionate about protecting the rights of workers and have helped recover millions of dollars in unpaid overtime wages for our clients. Contact us for a free and confidential review of your situation.