Wisconsin Wage Law Explained
The Wisconsin Labor Laws address many issues relating to the relationship between employer and employee, including the rules for the payment of wages, overtime pay, final wages, the rules for authorized and unauthorized payroll deductions, and recordkeeping requirements.
Our overtime rights lawyers represent Wisconsin 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. If you believe you’ve been deprived of the compensation to which you’re legally entitled, please contact the Lore Law Firm.
Understanding Wisconsin Wage and Overtime Laws
While Wisconsin 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. In most instances, however, federal law will cover issues involving overtime pay and minimum wage.
The current Wisconsin minimum wage and the federal minimum wage is $7.25 per hour.
Employers may pay an “Opportunity Wage” of $5.90 per hour for the first 90 days of employment. On the 91st day, the wage must increase to $7.25 per hour
Wisconsin’s Minimum Wage laws allow employers to take a credit against the state minimum wage requirement for their service employees that customarily receive gratuities (tips). An employer must pay at least $2.33 per hour in wages. If an employee’s tips combined with the employer’s wages of at least $2.33 per hour do not equal at least $7.25, the employer must make up the difference.
Wisconsin state labor laws regarding the payment of overtime are largely consistent with the federal overtime laws. As most employers are covered by the FLSA, generally the FLSA will apply and requires 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 Wisconsin, the overtime pay rate amounts to $10.88 per hour (1.5 x $7.25).
The state overtime law applies to most Wisconsin employers, including state and local units of government but not necessarily to each individual worker. Covered workers, regardless of age, must be paid 1 1/2 times their regular rate of pay for all hours worked in excess of 40 hours a week.
The state law applies to factories, mercantile (see definition of mercantile) or mechanical establish-ments, restaurants, hotels, motels, resorts, beauty parlors, retail and wholesale stores, laundries, express and transportation firms, telegraph offices and telephone exchanges.
The state law does not apply to:
- Agriculture (farming) as defined WI Stats. 102.04(3)
- Domestic service (in the private home of the employer)
- Some non-profit organizations (contact the Division for specific information)
- Federal agencies
Which Employees are Entitled to Overtime Pay
Most workers in Wisconsin are entitled to overtime pay when they work more than 40 hours per week. In certain circumstances, however, there are exemptions.
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 Wisconsin when making the determination of whether they are classified as exempt or non-exempt from the overtime pay laws.
Misclassification of Independent Contractors
Misclassification occurs when a business treats its workers as independent contractors (or subcontractors) rather than employees to avoid legal obligations such as social security taxes, worker’s compensation, unemployment insurance and overtime pay.
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.
There are several factors to be considered in determining if a worker in Wisconsin is an employee or independent contractor (a/k/a 1099 employee)
If properly classified as an independent contractor under Wisconsin law, workers are typically eligible for only the specific compensation bargained for in a contract.
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.
Employers are only allowed to deduct certain items from an employee’s wages, such as taxes, insurance premiums, etc. Employers are not permitted to charge employees for breakages, cash shortages, fines or any other losses to the business, unless the employee has authorized the deduction in writing.
Most Wisconsin employers must pay workers all wages earned at least monthly, with no longer than 31 days between pay periods. The only employers exempted from this requirement are:
- employees engaged in logging (must be paid at least quarterly)
- those engaged in farm labor (must be paid at least quarterly)
- unclassified employees of the UW system (left to the system)
- Part-time firefighters and part-time emergency medical
- technicians(must be paid at regular intervals, at least annually).
Employers may establish more frequent pay periods (e.g., weekly, biweekly or semimonthly).
Wisconsin law requires that an employer pay an employee who leaves or is discharged from employment in full for all wages or salary earned by the employee no later than the next regular pay day following the date of separation.
Pay Stubs / Pay Statements
Wisconsin labor laws require an employer provide pay stubs to employees showing:
- the hours the employee worked,
- the wages earned by the employee, and
- the deductions made from that paycheck.
Meal and Rest Breaks
The Wisconsin Wage and Hour Laws do not require that employers provide rest periods, coffee breaks, or meal periods to adult employees. However, employees under 18 years of age may not work longer than six consecutive hours without receiving at least a 30-minute duty free meal period.
Any meal break or rest period that lasts twenty-minutes or less must be paid.
The federal Fair Labor Standards Act does not require that an employer give employees any mandatory rest breaks or meal breaks.
One Day of Rest in Seven
Employees who work in factory or retail establishments must receive one day off (24 consecutive hours) per calendar week (Sunday through Saturday), unless an exception applies.
The law does not require that the rest must be given every 7 days. For example, an employer may legally schedule work for 12 consecutive days within a 2 week period if the days of rest fall on the first and last days of the 2 week period.
Exceptions to this law:
- It does not apply to an employee who states in writing that he or she voluntarily chooses to work without a day off in 7 consecutive days.
- It does not apply to janitors; watchmen; persons employed in the manufacture of butter, cheese or other dairy products or in the distribution of milk or cream; or in canneries and freezers; persons employed in bakeries, flour and feed mills, hotels, and restaurants; employees whose duties include no work on Sunday other than caring for live animals or maintaining fires, and any labor called for by emergency that could not reasonably have been anticipated.
- In paper and pulp mills, it does not apply to superintendents or department heads whose work is supervisory and not manual. It does apply to machine operators in paper and pulp mills, but in those mills it does not apply to millwrights, electricians, pipe fitters, and other employees whose duties include not more than five hours of essential work on Sunday, making necessary repairs to boilers, piping, wiring or machinery.
- It does not apply to workers in healthcare or other industries outside of factories or retail establishments.
Home Care Workers
Private employment agencies who make “home care placements” are required to provide the following information, in writing, to home care workers and home care consumers:
- who will be employing the worker,
- who will be responsible for withholding employment taxes,
- and who will be responsible for providing workers’ compensation, unemployment Insurance, and other liability insurance for the worker, if applicable.
Vacation or Holiday Leave
Wisconsin doesn’t require employers to provide workers with paid or unpaid vacation leave. If an employer chooses to provide such benefits, it must comply with the terms of its established policy or employment contract.
An employer is required to pay accrued vacation to an employee upon separation from employment if its policy or contract requires it. An employer may, however:
- cap the amount of vacation leave an employee may accrue over time;
- implement a “use-it-or-lose-it” policy requiring employees to use their leave by a set date or lose it, so long as the employee has agreed to the policy in writing;
- establish a policy or enter into a contract disqualifying employees from payment of accrued vacation upon separation from employment if they fail to comply with specific requirements, such as giving two weeks notice or being employed as of a specific date of the year.
Statute of Limitations
Wisconsin’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 by overtime pay lawyers on a class or collective basis on behalf of all workers who were subjected to the same illegal pay practices.
Layoffs, Plant Closings and WARN Notices
The Worker Adjustment and Retraining Notification Act (WARN) offers protection to Wisconsin workers, their families and communities by requiring employers to provide notice 60 days in advance of covered plant closings and covered mass layoffs. This notice must be provided to either affected workers or their representatives (e.g., a labor union).
An employer who violates the WARN Act by failing to provide appropriate notice is liable to each employee for an amount up to 60 days back pay and benefits for the period of violation.
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 Wisconsin. Our attorneys, and the Wisconsin 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