Employers who pinch pennies by not paying workers for overtime hours may wish to rethink this clandestine form of keeping costs down. A recent lawsuit over unpaid overtime in California resulted in a $1.47 million settlement.
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The lawsuit alleged that a software company, Agilysys, forced installation specialists in different regions to work 12 hour days, seven consecutive days per week or more, and barred them taking their 30 minute lunch breaks.
California law is stricter than federal law when it comes to employee breaks. As it explains on the state of California’s government website, employers must give employees a 30 minute meal break if they work for five hours. Not only that, but if the employee is not free to leave the premises, then the meal break must be paid.
Workers in California are entitled to overtime pay for more than 8 hours in one day or 40 hours in one week. After 12 hours in one day, the employee is entitled to double time pay. And if an employee work for 7 consecutive days, the first 8 hours on the 7th day is overtime, and after 8 hours is double time.
Who Is Exempt?
Some employees are exempt from overtime laws, even in California. Agilysys classified the installation specialists as exempt. The problem was that they were most certainly not exempt.
Independent contractors who are not employees of a company are exempt from overtime pay. Agilysys had employees working for Agilysys, not independent contractors working for themselves or an outside company.
Salaried employees are also exempt from overtime pay. Salaried employees receive the same pay and benefits each week regardless of hours worked.
This is an expensive rule to break. Companies would be smart to pay employees what they owe them when they work, rather than to having to pay millions in a settlement that also results in bad press and bad feelings overall. The good news is for California employees: California has your back.
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