Overtime Lawsuits Becoming More Common

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As USA Today recently reported, there has been an uptick in overtime pay lawsuits in the past several years. Last year saw a 32 percent increase in lawsuits seeking payment for overtime when compared to the past three years.

Some legal experts have theorized that the rise in lawsuits is directly linked to the country's ongoing economic downturn. As companies are facing rising costs and lower revenues, they are taking drastic measures to slash expenses. One surefire way to cut costs is to decrease the workforce, so massive layoffs and restructuring measures have many companies staffed by left fewer employees tasked with maintaining the same level of productivity as a full labor force.

With fewer workers there to fulfill a company's services, those same employees could be facing a workload that has doubled or even tripled. In spite of the increased workload, employees may fear on-the-job ramifications of complaining about the unfair treatment to their boss or human resources professional.

Overtime lawsuits are a legal avenue that offers an opportunity to seek fair compensation without the day-to-day pressures of complaints within the management structure. They are commonly brought as class actions, so there is also a certain level of anonymity associated with them that helps allay the fears of individuals who feel they have not been properly compensated for the overtime they have worked.

Improper Employee Classification Could Lead to Unpaid Overtime

The federal Fair Labor Standards Act and California's overtime laws exempt certain types of employees from eligibility for overtime compensation. Exemptions are set forth by the regulations of the California Department of Industrial Relations and orders issued by the California Industrial Welfare Commission. These employees typically receive a flat wage ("salaried" employees) for their efforts and include but are not limited to a wide range of industries:

  • Executive/Administrative/Professional employees (those who either work in management-level positions or assist those in higher-level positions and those who work in such specialized fields as law, medicine, engineering, architecture, teaching, accounting, optometry and dentistry)
  • Employees involved in the creation or execution of computer software
  • State/local/municipal government employees
  • Drivers
  • The parent, child or spouse of an exempt employee
  • Sales employees receiving at least half their pay in the form of commissions
  • Union workers
  • Fishermen/women
  • Full-time carnival employees

Some employers will purposely misclassify employees as fitting into one of these exempt categories to get out of paying overtime compensation. Other employers are innocently misclassifying workers, but the result is the same: improper classification usually results in unpaid overtime. Overtime lawsuits are one way that overworked and underpaid employees can seek the compensation they deserve. While many employees are wary of asking for overtime pay, both California state and federal laws provide legal avenues to seek compensation. If you have questions about unpaid overtime, contact an experienced employment law attorney to learn more about your legal rights and options.