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Top Questions about Hourly Wages

The Fair Labor Standards Act (FLSA) lays out the federal minimum wage provision. It is administered and enforced by the U.S. Department of Labor (DoL) Employment Standards Administration's Wage and Hour Division. Wages are to be paid on the regular payday for the pay period covered. Deductions for any reason that reduces the amount of overtime pay due or wages of the employees below the minimum rate set by the FLSA is illegal. Often, changes in job profiles or company policies lead to reduction in pay, giving rise to disgruntled employees. However, understanding provisions of the FLSA would help both employer and employees. Below are some of the top questions on the subject answered by Legal Experts.

What is federal law regarding reduction of hourly wages.

The FLSA is the federal law requiring employees to be paid for the time worked. While it does not set a minimum period, it states that employers must pay on specific intervals whether these are weekly, fortnightly, monthly, etc. If wages are delayed willfully, employers may be liable for damages and interest.

In the absent of a written contract, the employee may reduce wages of an employee. However, under the FLSA and the Wages Act, an employer may not reduce the wages of an employee without sufficient notice and must do so before the employee works any hours at that wage. Failing to give notice may attract a claim with the state DoL’s Wage and Hour Division for additional wages due.

Company has started reducing hourly wages for some employees without changing their job status or work requirements. Is this legal in Alabama?

That would depend on whether you have a contract with your employer specifying your wages and that it cannot be changed unless under particular circumstances. If your employer is violating such a contract, you may file a claim with the DoL’s Wage and Hour Division. However, in the absence of a contract, the employer may reduce your wages at will as long as it meets the minimum wage requirements.

If you feel that your employer is reducing wages by discriminating against certain employees based on their race, age, disability or membership to a protected class, etc., it is unlawful and you may file a claim.

My hourly wages has been cut stating “performance related issue”. Is that legal?

If you work in an “at-will” state, employers have the legal right to reduce employee’s wages at their discretion. In reducing the pay, the employer is not obliged to correspondingly reduce the duties of the employee. However, any reduction must not be lower than the minimum wage and overtime regulations set by the FLSA. Also, the employer must adhere to any contractual obligations or company policies. Reduction of wages based on illegal discrimination too would attract liability.

In South Carolina, can employees working on hourly wages ask to be put on the clock for when they are travelling on work? Also, if there is such a violation, can one claim retrospective hours?

Under the FLSA, an employer must compensate for employment on out of time assignments and job sites. The employer may only deduct the time it normally takes you to travel from your home to the workplace when sending you on an out of town job site. Non-profits are not exempt from payment of wages to employees and must pay for all hours.

If the employer does not comply with the FLSA, you may file a claim with the US Department of Labor's Wage and Hour Division. They will investigate the record of past three years and award you those wages as damages. You cannot be fired for filing such a claim as it would give rise to a separate suit of retaliation which is prohibited by law. You may win this whether or not the wage claim is decided in your favor.

In NY, can an employee working on hourly wages seek double pay if she is called back on the next shift without the mandatory eight-hour lapse?

You may not be able to claim double pay. However, depending on your wage, you may invoke the provision of one hour extra of minimum wage pay under certain circumstances. You may be entitled to this extra pay at the New York State Minimum Wage hourly wage rate if your shift lasts more than 10 hours, or they are split.

Is an employer required to give notice prior to reducing hourly wages in California?

Employers in California are obliged to pay as per the contractual agreement and may not reduce the pay without discussing the same with the employee. While it may be advisable to hire an attorney to file a claim, the attorney’s fees to fight the claim may exceed the wage reduction in your case.

Several states have minimum wage laws. However, employers are subject to both federal and state laws. An employee will be awarded the higher of the two minimum wages in case he/she files a claim under the FLSA. Under specific circumstances, certain minimum wage exceptions are applied to full-time students and student-learners, tipped employees, those under 20 years in the first 90 consecutive days of employment and workers with disabilities. Get in touch with Legal Experts to know more about the FLSA and your rights therein.
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