Illegal compensation methods are more common than many people realize. Whether intentional or not, many North Carolina employers owe their workers for unpaid wages because of their failure to properly compensate them for the hours they work. Below, we detail some of the most common illegal compensation methods employers use in North Carolina.

Misclassifying Employees

Employers commonly misclassify workers to avoid paying them overtime pay. They pay employees a salary instead of hourly pay, and then claim they are not entitled to overtime as exempt employees. However, simply receiving a salary is not enough to qualify a worker as exempt. Many salaried employees do not meet the other qualifications necessary for an overtime exemption classification.

The worker’s title also has little to do with their classification. Some employers offer workers supervisory roles (in title only) to exempt them from overtime. However, unless they truly serve as a supervisor and meet the other qualifications of being exempt, they must still receive overtime pay for any hours worked over 40.

For example, if your employer names you an assistant manager but does not assign you any supervisory duties, you are unlikely to qualify as an exempt employee. You should still receive overtime pay unless your job duties meet the requirements for exempt employees.

Employers also sometimes misclassify employees as independent contractors to avoid paying minimum wage or overtime. If your employer controls the work you do and the schedule you keep, and your work is essential to the business, you are likely an employee and deserve compensation as such.

Shorting an Employee’s Overtime Pay

Federal laws require most employers to pay non-exempt workers time and a half for any hours worked over 40 each week. Some employers ignore this rule, paying workers their normal hourly wage for all hours worked. When this occurs, they are missing the extra half time during their overtime hours.

In some cases, employers opt to pay their employees for overtime, but fail to calculate it correctly resulting in workers taking home less than they earned.

One way this commonly occurs is when the employer averages the hours worked over two weeks instead of paying out for overtime on a weekly basis. For example, if an employee works 60 hours one week and 20 the next, their employer would average this out to 40 hours each week (which would mean the employee receives no overtime hours). However, the worker should receive 20 hours of overtime pay the first week.

Employers may also short workers by calculating their overtime rate without including bonuses, commissions, or other extra payments received on top of a small hourly wage. Some of these workers earn less than minimum wage when you only take their hourly pay into account, and their overtime pay should reflect a regular hourly wage of at least minimum wage. Tipped employees and those who work on commission are the two most common victims of this type of illegal compensation method.

Failing to Count All Work Time

Some employers fail to count all time a worker puts in as time worked. This is one of the most common ways employers illegally withhold wages from a worker. Your employer needs to compensate you for any time you spend engaged in work, even if you are simply sitting by the phone and waiting for it to ring. Other times your employer may be withholding pay include:

In one of the most nefarious illegal compensation practices, some employers install time clocks that round down or otherwise do not calculate the entire time an employee works. While this may only short an employee a few minutes wages each day, these unpaid wages add up over time. Because this affects all hourly employees, the total unpaid wages associated with this type of illegal compensation method can compound quickly.

What Can I Do to Recover Unpaid Wages Because of These Illegal Compensation Methods?

If you have unpaid wages because your employer engaged in one of the illegal compensation methods above, get employee rights attorney Phil Gibbons on your side. We can help you recover the pay you earned, as well as additional compensation in some cases.

Call us today at 704-612-0038 to schedule a complimentary case review with our North Carolina employee rights team.