Mistake 1: Misclassifying Non-Exempt Workers as Exempt
The most costly wage violation: incorrectly labeling hourly or lower-paid workers as 'exempt' from overtime. Exemption requires BOTH a salary test ($684+/week) AND a duties test (executive, administrative, or professional duties). Job title alone doesn’t create exemption. A 'manager' who actually does the same work as hourly employees and earns under $684/week is non-exempt and must receive overtime.
Mistake 2: Not Paying for All Hours Worked
Under FLSA, all hours actually worked must be counted toward overtime — including time checking emails from home, short work-related calls, and pre/post-shift work. If you’re expected to be in your work clothes before the shift starts, that time may count. Requiring employees to arrive early, stay late, or answer calls after hours — without pay — is wage theft if it results in hours over 40 without overtime pay.
Examples of illegal off-the-clock work: Pre-shift setup that takes 15+ minutes and is required. Post-shift cleanup beyond negligible time. Required training completed at home. Work emails answered from home past 40 hours. Donning and doffing specialized protective equipment (for many industries). If you work it, you must be paid for it — and it must count toward overtime.
Mistake 3: Deducting Breaks That Are Actually Work Time
Short breaks of 20 minutes or less generally must be counted as paid work time. Only 'bona fide meal periods' (typically 30+ minutes with no work duties) can be unpaid. An employer who deducts a 15-minute break from your time, then counts your work time as only 7.75 hours instead of 8, is incorrectly reducing your hours toward overtime.
Mistake 4: Using a Biweekly Average to Avoid Overtime
Employers cannot average hours across two weeks to avoid overtime. If you work 50 hours in week 1 and 30 in week 2, you’re owed 10 hours of overtime for week 1, regardless of the biweekly average of 40. Some employers intentionally schedule this way to reduce overtime costs — it’s illegal.
Overtime owed with biweekly scheduling scenarios
| Scenario | Week 1 Hours | Week 2 Hours | OT Owed? |
|---|---|---|---|
| Biweekly average = 40 | 50 hours | 30 hours | Yes — 10 OT hours in week 1 |
| Both weeks equal | 42 hours | 42 hours | Yes — 2 OT hours each week |
| Employer averages: no OT | 50 hours | 30 hours | Illegal — must pay week 1 OT |
| 4/10 schedule (optional FLSA) | 40 hrs (4×10) | 40 hrs | No OT — still ≤40 hrs/week |
Mistakes 5–7: Additional Common Violations
- Mistake 5: Excluding non-discretionary bonuses from the regular rate (most common math error for bonus-earning workers)
- Mistake 6: Paying only 'straight time' for overtime (paying $22/hr for all hours, including OT, instead of $33/hr for OT hours)
- Mistake 7: Not paying overtime on vacation or holiday pay that substitutes for work hours (in states that require it)
Verify Your Overtime Pay Is Correct
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