Wage and Hour Disputes for Employers

You’ve probably read about employers being sued in wage and hour disputes.

Wage and hour laws cover a range of topics about work and compensation including:

  • Minimum wage
  • Tips
  • Overtime pay
  • Meal and rest breaks
  • What counts as time worked
  • When employees must be paid
  • Items employers must pay for such as uniforms

Major changes are coming to resolve wage and hour disputes employers face.

Overtime and wage and hour disputes often arise from exemption questions.


There are a lot of laws that address payment and wage and hours.

Arizona laws specify when employees must be paid and what liabilities employers have for wrongfully withholding paychecks. (Answer: they may be ordered to pay three times the amount due!)

Federal wage and hour laws come under the Fair Labor Standards Act (FLSA). Many states, cities, and counties have their own laws as well.

The result is that employers may well face a mix of laws about payment. Usually the most generous, or pro-employee, law has priority. An example is the Federal minimum wage law. Some states and cities have been raising their minimum wages. Employers in these places must pay the higher wage.

Overtime and Other Common Wage and Hour Disputes 

Overtime lawsuits are the most common wage and hour cases brought by employees. These are disputes over whether they are adequately paid for hours worked. The FLSA rules apply if there are not local laws that address this.

Most cases begin when non-exempt employees are treated like exempt employees.

  • Exempt” means exempt from the FLSA requirement to pay overtime at time and one half.
  • In other words, exempt employees may work overtime without being paid time and a half, but non-exempt employees must receive this overtime pay.

It’s becoming more difficult to determine if employees are properly considered exempt or non-exempt. The US Department of Labor wants to create a blue line to define this by defining non-exempt employees as those who earn under $50,440 per year. This article discusses expected changes in overtime laws and what employers can do in the meantime to ensure they are following current law.

Wage and Hour Disputes Employers Need to Understand

Here are some facts about wage and hour issues employers need to fully understand. Some may feel like a “gotcha” so it’s important to be aware of them!

  1. No contract can cancel an employee’s right receive overtime.
  2. Simply being paid a salary does not make an employee exempt from overtime. Salaried employees may be entitled to overtime compensation as well
  3. Overtime exemptions often apply to high-level managers and administrators. A fancy job title does not make an employee exempt from overtime pay.
  4. If the FLSA finds for employees, employers will have to pay back a lot:
    •  Three years of back overtime
    • Double overtime awards
    • Payment for employee legal fees

The bottom line is that you need a skilled and experienced attorney to guide you through this minefield.

How are Overtime / Wage and Hour Disputes Investigated?

The U.S. Department of Labor (DOL) is authorized to inspect workplaces and bring actions against employers who have violated the FLSA.

These investigations are done though audits and onsite inspections. It is critical for employers to prepare for these audits and inspections and assert their rights to manage the flow of information during investigations. If your company is being investigated by the DOL, expect to provide:

  • Payroll and tax records
  • Written policies and procedures
  • Interviews with employees

DOL may even conduct surveillance and collect evidence.

The most important thing any employer can do to prepare for an audit is to comply with the entire process. Even better, they can prepare for a potential audit and inspection by having preventive measures in place including:

  • A comprehensive wage and hour program
  • Periodic self-audits
  • Good record-keeping habits
  • Employee training in the event that there will be an investigation process is as painless as possible. 

An Employment Lawyer Helps Businesses Prepare for DOL and FSLA Investigations

It’s important that employers understand their rights and obligations in wage and hour issues. Education also helps establish a good faith defense if questions arise during or after a DOL investigation.

If your business is facing wage and hour litigation or a DOL investigation, you will need an employment attorney who thoroughly understands FSLA requirements. Even if you are pretty sure you’re in compliance with the law, there are changes coming up. Be prepared for them. Contact my office for an FSLA consultation.