Is Your Employer Violating Overtime Rules?

As a general rule, both the North Carolina Wage and Hour Act (WHA) and the federal Fair Labor Standards Act (FLSA) require employers to pay employees time and a half for work beyond 40 hours a week. If your employer has refused to pay you overtime, refused to pay you the full amount of overtime you are due, or told you overtime “doesn’t apply” to you, you may be due back wages.

Employer violations of overtime laws can take a lot of forms, but violations typically fall into two categories: misclassifying employees into “exempt” categories as a way to avoid overtime, or refusing to pay overtime for various reasons.

Misclassifying Employees

Misclassification takes two forms: incorrectly identifying employees as belonging to categories exempted from the FLSA and the North Carolina WHA, and incorrectly identifying employees as independent contractors rather than employees.

“Exempt” Employees

The FLSA and associated US Department of Labor regulations identify some types of employees as exempt from overtime regulations. North Carolina’s Department of Labor has adopted the Department of Labor definitions for its enforcement of the WHA.

Exempt employees are paid on a salary basis, make at least $684/week, and perform specific kinds of work, as executives, managers, “learned professionals,” or creative professionals. Some tech workers and outside sales professionals are also exempt. Some employees making more than $107,432—at least $684/week of that in salary—may also be exempt from overtime rules.

Independent Contractors

The FLSA and WHA, and their exemptions, only apply to employees. They do not apply at all to independent contractors. The distinction between an employee and an independent contractor is often understood to be a matter of taxes and not much else. But whether you are an employee or an independent contractor also determines your eligibility for benefits, unemployment, and other protections—including the protections available under the FLSA and North Carolina’s WHA.

Neither the IRS (nor North Carolina’s Department of Revenue) nor the Department of Labor care what your employer calls you, or whether your pay is reported on a W2 or a 1099. Each agency has its own test for determining what your actual status is. And while the tests overlap, they are not identical. In some circumstances, you may be considered an employee under one test but an independent contractor under another.

If your employer has misclassified you to escape regulations around wages—including overtime—and benefits, you may be able to seek compensation under both federal and North Carolina law. You should consult with an experienced attorney, like Miller Law Group’s dedicated lawyers, to understand your rights and how to protect them.

Not Paying Overtime

 Employers may, mistakenly or otherwise, refuse to pay overtime for any number of reasons.

• Requiring “off the clock” work. Requiring you to work before you clock-in, perform routine tasks before clocking in or after clocking out, or not paying you for travel, meetings, or required preparations are all violations of the FLSA and WHA. When these off-the-clock hours push your work time over 40 hours, they also violate overtime rules.
• Refusing to pay for overtime hours that are not approved ahead of time. Many companies have a policy requiring that overtime hours be preapproved by a manager or supervisor. Your employer may discipline you for violating these rules, but they may not refuse to pay you for time worked—including required overtime.
• Giving comp time instead of overtime pay. Private employers are not permitted to replace overtime pay with “comp time,” even if the comp time is provide at one and half times the time worked.
• Not paying overtime at the correct rate. If your employer doesn’t pay you for time worked beyond your regular hours, or doesn’t pay time and a half for hours above 40, and you are not exempt, you are not receiving pay to which you are entitled.

If your employer engages in any of these practices, you may be entitled to compensation, including double the amount of back pay owed you for up to two years before you file suit (three years if the court finds the violation is willful).

If your employer engages in any of these practices routinely, you may be the face of a class action suit to help your coworkers recover their lost wages as well.

You should consult with an experienced attorney, like Miller Law Group’s dedicated lawyers, to understand your rights and how to protect them.