- minimum wage violations
- non-payment of wages, bonuses or commissions
- unpaid overtime
- entitlement to equal pay
Federal Minimum Wage Law
The Federal Minimum Wage Law is known as the Fair Labor Standards Act or “FLSA” for short.
Employers Covered by the Law
Employers whose businesses are covered by the FLSA, or who have employees engaged in interstate commerce, are required by the FLSA to pay the minimum wage. Unlike some other laws relating to employment, coverage does not hinge upon how many employees the employer has, but instead looks at the nature of the work performed by the employer and the work done by the employee to determine whether interstate commerce is involved. Be assured that coverage is extremely broad.
Amount of Wage to be Paid
As of July 24, 2007, the Federal Minimum Wage is $5.85 per hour. The plan is for the wage to increase to $7.25 by the year 2009.
Almost all states have their own Minimum Wage laws as well. In many cases their minimum wage rate is higher than the federal wage. In situations where the state minimum wage and the federal minimum wage are not the same, the employee must be paid the higher of the two wages.
Exceptions to the Minimum Wage
- Tipped employees (waiters, hairstylists …) do not have to be paid the minimum wage because they make-up the compensation in tip payments. According to the law, “tipped employees” are those who customarily and regularly receive more than $30 a month in tips. Tips actually received by tipped employees may be counted as wages for purposes of the FLSA, but the employer cannot pay less than $2.13 an hour in direct wages, and the combination of the wage and the tip on an hourly basis must equal the federal (or state) minimum wage.
Service Charges: A compulsory charge for service, for example, fifteen (15%) percent of the bill, is not a tip. Such charges are part of the employer’s gross receipts. Where service charges are imposed and the employee receives no tips, the employer must pay the entire minimum wage and overtime required by the Act.
- Meals, lodging, and other items included as compensation. In some cases an employer may include as wages the reasonable cost, as determined by the Secretary of Labor, for furnishing the employee with board, lodging, or other facilities, if such board, lodging, or other facilities are customarily furnished by such employer to his employees. For example, Joe is provided with lodging worth an estimated $250 per month based on other rentals in the area. The employer can count that $250 towards Joe’s rate of pay. This should be explained to the employee and agreed upon at the time of engagement.
Penalties for Minimum Wage Violations
Where the employer violates the minimum wage law, penalties may not only include the back wages owed to the employee, but additional damages such as treble damages and attorney’s fees.
Minimum Wage Rate for Maryland, Northern Virginia, and Washington D.C.
Washington DC is $7.00/hour; Maryland $6.15/hour and Virginia follows the federal wage rate.
Bonuses, Commissions and Leave
In many cases bonuses and commissions earned by the employee may also fall under the coverage of the local wage laws. Once an employee has earned the bonus or commission the employer is generally obligated to pay him/her even if the employee has been separated from the employment at the time. An examination of the employee’s circumstances is required in each case.
Annual and Sick Leave
Amounts for accrued sick leave are generally not recoverable by the employee, unless the employer has entered into a contract or otherwise has a policy paying out sick leave when an employee leaves the job. On the other hand courts and wage authorities have found that earned annual leave may have to be paid to the employee unless the employer has a stated policy against it.
The FSLA and most states have laws that require employers to pay their employees at least one and one-half times the regular rate of pay for all hours worked over 40 in a given week. Even in states that have no such laws, employers are still bound by the overtime provisions of the Fair Labor Standards Act. The FLSA does not require overtime pay for work on Saturdays, Sundays, holidays, or regular days unless the employee will be exceeding 40 hours for the week.
Overtime pay for those employees or professions that are not exempt is one and one-half (1 ½) times the hourly wage for all hours worked in excess of 40, during the course of a single work week. For example an employee earning $10.00/hour is entitled to $15.00/hour once they have worked 40 hours in a single work week.
Much like the minimum wage laws, overtime laws include a number of exemptions; bona fide executive, administrative, professional and outside sales employees. Section 13(a)(1) and Section 13(a)(17) of the FLSA also exempt certain computer or high-tech type employees. To qualify for an exemption, employees generally must meet certain tests regarding their job duties and be paid on a salary basis at not less than $455 per week. Job titles do not determine exempt status. In order for an exemption to apply, an employee’s specific job duties and salary must meet all the requirements of the regulations. Consequently whether overtime is appropriate may in many instances only be determined on a case-by-case basis.
Maryland, Washington DC and Virginia contain similar exemptions found in the FLSA. In Washington DC some other exemptions include people employed in private households who live on the premises, seaman, railroad workers, newspaper delivery people, parking lot attendants and car washers.
Equal Pay for Men and Women
The federal law known as the Equal Pay Act (EPA) prohibits discrimination on the basis of sex in the payment of wages or benefits, where men and women perform work of similar skill, effort, and responsibility for the same employer under similar working conditions. Note that:
- Employers may not reduce wages of either sex to equalize pay between men and women;
- A violation of the EPA may occur where a different wage was/is paid to a person who worked in the same job before or after an employee of the opposite sex;
- A violation may also occur where a labor union causes the employer to violate the law
If you need the help of an experienced employment discrimination lawyer, personal injury or insurance attorney in Maryland, Washington DC or Northern Virginia, please contact the Law Offices of Stuart L. Plotnick, LLC in Rockville, Maryland.