Am I Being Exploited? Understanding Labor Laws And My Rights

Labor laws are a complex web of federal, state, and local regulations that protect the rights and well-being of employees, ensuring their safety and health. These laws cover a range of issues, including minimum wage, overtime pay, meal breaks, workers' compensation, and protection against discrimination. While most employers are law-abiding, thousands of companies violate labor laws every day, either intentionally or unintentionally. As an employee, it is important to be aware of your rights and take action if you believe they are being infringed upon.

Some common ways in which companies break labor laws include failure to pay minimum wage or overtime, misclassifying employees as independent contractors, not providing meal breaks, making illegal deductions from wages, keeping inaccurate records, and failing to maintain workers' compensation insurance. If you suspect your company of breaking labor laws, the first step is to gather information and understand your rights. You can then try resolving the issue by speaking directly to your employer or manager, assuming they are unaware of the legal problem. If this does not work, you may need to consider more formal avenues, such as contacting your state's labor department or seeking legal advice. It is important to carefully weigh your options, as taking legal action can sometimes negatively impact your working environment and future career prospects.

Failure to pay minimum wage

The federal minimum wage in the United States is $7.25 per hour. Many states have higher minimum wages, and workers are entitled to the more generous rate. Minimum wage violations are particularly prevalent among tipped employees.

Labor standards establish that workers who make more than $30 per month in tips are entitled to a cash wage of no less than $2.13 per hour. However, if your rights are being violated, it is your responsibility to ensure that your compensation meets or exceeds the legal minimum. Your employer is unlikely to notify you if your compensation during a particular month of employment does not meet the federal minimum wage.

While employers are allowed to factor tips into their minimum wage obligations, they can't deduct more than $5.12 from a tipped employee's hourly wage.

Minimum wage violations are widespread in the United States. A 2008 survey of 4,387 workers in low-wage industries in Chicago, Los Angeles, and New York City found that 26% of respondents were paid less than the legally required minimum wage in the previous work week. These violations were not trivial in magnitude: 60% of workers were underpaid by more than $1 per hour.

In New York, as of December 31, 2014, the state raised the minimum wage to $8.75 per hour. This minimum wage applies to domestic workers and farm laborers, with a few exceptions. Employers must display a poster providing information to employees about the minimum wage laws.

In California, if your employer has failed to pay you at least the applicable minimum wage for every hour worked, you may be entitled to liquidated damages. Liquidated damages are a set amount intended to compensate you for losses that are difficult to quantify. In this case, you would be entitled to liquidated damages equal to the amount of your lost wages.

If you believe your employer is not providing you with the salary you deserve, you can seek legal representation. Wage and hour lawyers can help employees investigate potential claims and seek compensation from employers engaging in misconduct.

Employee misclassification

In the United States, the Fair Labor Standards Act (FLSA) outlines the criteria for classifying a worker as an employee or an independent contractor. The FLSA states that an employment relationship between a worker and an employer entitles the worker to specific benefits and protections, including minimum wage and overtime pay. Misclassification occurs when an employer treats a worker who meets the criteria of an employee under the FLSA as an independent contractor.

The Wage and Hour Division of the U.S. Department of Labor published a final rule in January 2024, revising its guidance on determining whether a worker is an employee or an independent contractor under the FLSA. This guidance is available in the form of regulations, which employers and workers can refer to when analyzing a worker's status.

The misclassification of employees as independent contractors is a serious issue as it can result in workers being denied their rightful benefits and protections. For example, misclassified employees may not receive the minimum wage, overtime pay, unemployment insurance, workers' compensation, or anti-discrimination protections that they are entitled to under federal, state, and local laws. Additionally, misclassification can hurt law-abiding businesses by creating unfair competition and reducing tax revenue for federal and state governments.

To address the issue of employee misclassification, the Wage and Hour Division provides resources and guidance to help employers and workers understand the criteria for classifying workers correctly. It is important for workers to be aware of their rights and entitlements under the FLSA and other relevant laws to ensure they are not being misclassified and denied their rightful benefits.

Failure to pay for work breaks

While federal law does not require employers to provide lunch or coffee breaks, it does consider short breaks (5 to 20 minutes) as compensable work hours. This means that if you work through a break, you should be paid for that time. Many companies attempt to withhold wages for breaks, but this is illegal.

In California, the law goes further. Employers are required to provide a 30-minute meal break when employees work more than five hours in a day, and a second 30-minute meal break if they work more than 10 hours in a day. Additionally, California employers must provide a 10-minute rest break for every four hours worked. If an employer fails to provide these breaks or interrupts them, they are required to pay the employee one additional hour of pay (premium pay) for each missed or interrupted break.

If your employer is not providing you with breaks or compensating you for missed breaks, you may be able to sue for unpaid premium pay and other damages. You can also file a claim with the California Labor Commissioner or consult an employment attorney to discuss your options.

Illegal deductions from wages

In the UK, the Employment Rights Act 1996 (ERA 1996) defines "wages" as sums of money paid to employees for the tasks they complete, including salary, holiday pay, bonuses, contractual commissions, one-off payments, statutory payments, and payments made in lieu of wages. The ERA 1996 protects employees and workers from unauthorised deductions of wages, including late payments payable under their contract.

There are, however, certain circumstances where employers are permitted to make lawful deductions. These include:

• Deductions required by law, such as income tax, student loan repayments, and court-ordered payments.
• Pre-agreed deductions, such as repayment for uniforms, travel expenses, or trade union subscriptions.
• Repayment of overpaid wages.
• Time off work due to strike or industrial action.
• In retail, bars, and restaurants, employers can deduct wages to cover damaged stock or mistakes and shortfalls in till money, provided that certain conditions are met, including not deducting more than 10% of pay before tax and notifying the employee in writing.

It is important to note that even with these permissible deductions, employers must make employees aware that the deductions will be made. Additionally, these deductions cannot bring an employee's wage below the minimum wage, as this would be a breach of employment laws.

If an employee believes that their employer has made illegal deductions from their wages, they may have legal recourse. They can start by discussing the issue with their employer to understand the reason for the deduction. If the matter cannot be resolved, the employee may be able to bring a claim to an employment tribunal, typically within three months of the date of the last deduction.

Inaccurate record-keeping

According to the FLSA, employers must maintain accurate records for each non-exempt worker, including information such as the employee's full name, social security number, address, birth date (if under 19), and the time and day of the week when the employee's workweek begins. Additionally, employers must keep track of the hours worked each day, the total hours worked each workweek, the basis for wage payments, regular hourly pay rate, overtime earnings, and all additions or deductions made to the employee's wages. These records must be retained for at least three years, and the information must be accurate.

Furthermore, inaccurate record-keeping can make it difficult to identify and address other workplace violations. For instance, if an employer does not keep proper records of wage rates and deductions, they may unknowingly (or knowingly) make illegal deductions from employees' wages, such as deducting more than what is allowed for tipped employees. Proper record-keeping is essential for ensuring transparency and accountability in the workplace.

To promote compliance with labor laws, the U.S. Department of Labor provides resources and guidance to employers. This includes information on the specific records that must be maintained, as well as the required retention periods for those records. By following these guidelines, employers can help protect themselves and their employees from the negative consequences of inaccurate record-keeping.

Frequently asked questions