Overtime Pay: What is Wage Theft?

Last updated on: March 26, 2015

Overtime Pay: What is Wage Theft?

Wage theft occurs when your employer fails to pay you wages that you are legally entitled to. In the context of overtime pay, this means that your employer must comply with the overtime provisions of the Fair Labor Standards Act (FLSA). If you are a victim of wage theft, you can secure back pay from your employer and perhaps even your legal costs.

Who is Eligible for Overtime Pay?

Workers are generally entitled to overtime pay, with two major exceptions: self-employed independent contractors and exempt employees. If you enjoy a high degree of independence from the party who hires you, you might be classified as an independent contractor. Certain kinds of white-collar employees are also ineligible for overtime pay if they earn a salary of at least $455 per week. These employees include executives, administrators, professionals and certain employees in the computer industry. Outside sales staff are also ineligible for overtime pay even if they make less than $455 per week.

How Much Does Your Employer Owe You?

If you are paid by the hour, your overtime rate for hours worked over 40 hours a week is 1.5 times your regular-time hourly rate. Multiply this rate by the number of hours of overtime you worked in a given week to arrive at your overtime pay.

The calculation is somewhat different for tipped employees, because of the dual pay structure for non-overtime hours (at least $2.13 an hour, but your employer must make up the difference if your tips didn’t bring you up to $7.25 an hour).  If you are paid a salary, it must be reduced to an equivalent hourly wage to calculate overtime.

Employer Overtime Scams

An employer may employ any one of a variety of scams to commit wage theft against you, including:

  • Averaging: Averaging your working hours over more than one week to avoid overtime pay by offsetting low working hours one week against high working hours the next (or previous) week. If you work 60 hours one week, your employer owes you 20 hours in overtime pay regardless of how few hours you work the next week.
  • Misclassification: Your employer might attempt to avoid paying you overtime by falsely classifying you as an independent contractor for example, or by giving you a false job title so that he can call you an “executive” and claim that you are exempt from overtime pay requirements.
  • Misinformation: Your employer may try to intimidate you by threatening to retaliate against you for enforcing your rights, hoping that you don’t realize that retaliation against a legitimate employee wage theft complaint is illegal in Texas.

Enforcing Your Rights

You can enforce your right to unpaid overtime pay by filing a claim with the Texas Workforce Commission (TWC) or the Wage and Hour Division (WHD) of the U.S. Department of Labor. The TWC statute of limitations requires you to submit your claim within 180 days after you earned the pay, while the WHD statute of limitations is 2 years. The assistance of a lawyer may be necessary to properly prepare your claim.


Let Us Make a Difference For You

If you believe you might be a victim of wage theft, it is critical that you secure skilled legal assistance well before the statute of limitations expires. Zinda Law Group, approved by the Better Business Bureau®, is a top-tier law firm with a number of experienced employment lawyers. We will not hesitate to tirelessly and fearlessly fight for your rights. If your overtime claim is based in the Austin area, call us at 800-863-5312 for a free initial consultation.