5 Tricks Companies Use to Avoid Paying Overtime to Employees

The overtime pay laws are old and complicated and most people do not understand them. Many companies do their best to NOT explain the laws to their employees.  Here is a list of 5 tricks with examples that companies use to cheat employees out of overtime pay:

Trick #1. Working Off The Clock

Some people are required to work a strict eight hour schedule and only get paid for those eight hours.  BUT employers often require employees to arrive early to boot up a computer, configure programs or do some other preparation so they are ready to go when their shift starts. This kind of “be ready pre-work” can require anywhere from 10 to 30 minutes (or more) before the shift.  It may also be required at the end of shift as well.

Another example of this “off the clock trick” is a customer service rep who is required to take any call that comes in before the shift ends, but stay on the call until the matter is resolved.   This could keep an employee working another 15 or 30 minutes past their shift.

These examples of extra time can add up to overtime hours and require payment at the premium time and half rate.   But many of these employees are simply not paid for “working off the clock.”

Trick #2. Inside Sales

There are two kinds of sales people: (1) Outside sales people and (2) Inside sales people. Outside sales people are road warriors who spend the majority of their time out of the office. Outside sales people are NOT entitled to overtime pay.
Inside sales people spend most of their time in the office drumming up business on the phone or online.  These people ARE entitled to overtime pay.  But, companies frequently classify all salespeople as exempt from overtime.  As a result, inside sales people are frequently deprived of overtime pay.

Trick #3.  Salary

Most people who earn a salary are under the mistaken belief that they are not entitled to overtime pay.   There is no rule that exempts salaried employees from the right to receive overtime pay.  In fact, the law assumes that ALL employees, salaried and hourly alike, are entitled to overtime pay.

As a general rule,  high level employees in management and executive positions are not entitled to overtime pay.  But most other middle and lower level employees are entitled to overtime pay even if they are paid a salary.   Unfortunately, many of these employees do not know they are entitled to overtime pay.

Trick #4.  Pseudo Job Titles

Have you ever met an Assistant Manager who does not manage anyone?  Or how about a Vice President who is not in charge of anything?  Companies often give employees fancy job titles as a way to trick them out of overtime pay.   The fake job title indicates that the person in that position does the kind of work that would exempt them from overtime pay.  Reality is – these job titles are often deceptive because the company just does not want to pay overtime.

For example, the Dollar General Store company gave employees pseudo titles such as Store Managers.  But these managers did very little managing and a lot of hard labor like sweeping and stocking shelves etc… A class action was brought on behalf of 1,424 managers and the company had to pay them $35 Million in unpaid overtime pay due to the bogus job titles.  If you have a job title, make sure it accurately describes what you really do.  It could be a trick to make you think that you are not entitled to overtime pay.

Trick #5.  Comp Time

Some companies have policy of providing “comp time” to employees who work overtime. Under these programs, EMPLOYEES ARE NOT PAID for the extra hours worked.  Instead, employees are given time off in the future.   These comp time plans are illegal because employees MUST be paid for all time worked, including overtime time.

What Should You Do if You are Owed Overtime Pay?

We strongly advise that you contact The Ottinger Firm for a consultation.  Call us at 347-492-1904 (NY) or 415-508-7786 (SF) and we will happy to explain your options and help you recover your overtime pay if you have a case.

Author Photo

Robert Ottinger, Esq.

Robert Ottinger is an employment attorney who focuses on representing executives and employees in employment disputes. Before starting his firm, Robert slugged it out in courtrooms trying cases for the government. Robert served as a Deputy Attorney General for the California Department of Justice in Los Angeles and then as Assistant Attorney General for the New York Attorney General’s Office in Manhattan.

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