Employee compensation refers to cash payments and benefits that employees receive in exchange for services that they provide to their employers. The majority of employees receive wages or salary payments as their main type of compensation.
Employees, however, may also receive other types of compensation, which may include:
- Health insurance;
- Life insurance;
- Disability insurance;
- Pensions;
- Vacation benefits; and
- Stock options.
Employee compensation is divided into two main categories, fixed and variable. Fixed compensation is typically a set rate and includes:
- Wages;
- Salaries; and
- Benefits.
Variable compensation usually dependents on the performance of the employee and may include:
- Sales commissions;
- Pay bonuses;
- Cash incentives; and
- Other similar forms of compensation.
The type and amount of compensation an employee expects is typically stated in the employment contract. For example, executives in some companies may be offered bonus incentives or high stock options as part of their compensation package.
Due to the broad package that type of employer offers, they might be able to justify paying a lower salary for the position. There are certain benefits that are required by law and certain benefits that are negotiated between the employer and the employee.
It is important for employees to fully understand their compensation packages so they can determine if their employer is attempting to deny them compensation to which they are entitled.
Compensating Hourly Employees for Off the Clock Work
The phrase “off the clock” refers to the time that is spent in the context of a work-related activity where no compensation is provided to the employee. For example, off-the-clock time may include:
- Meetings;
- Time spent driving between work sites; and
- Work that is performed after their shift is complete.
In certain states, the off the clock work policy provides that an employee is legally entitled to payment for off the clock work that is performed in the scope of their employment. Courts in these states will typically allow an employee to sue their employer to recover hourly wages for off the clock time that included work-related activities.
What Are Some Examples of Compensable Off the Clock Work?
Time that an employee spends engaging in certain types of work-related activities may be compensable, or something the employee should be paid for, even if those activities appear to have been completed off the clock, including:
- Traveling during work for a work-related activity;
- Being on a restrictive on call time or engaged to wait period for the employer’s benefit;
- Any post-work or pre-work job-related activities necessary to work performance;
- Short off the clock rest periods, typically 20 minutes or less in duration;
- Off the clock meal breaks, typically less than 30 minutes in duration; or
- Longer meal breaks, if the employee is on duty or otherwise not free to leave.
Does Federal Law Protect Off the Clock Employees?
Under the Fair Labor Standards Act (FLSA), an employer is required to compensate a non-exempt employee’s work time whether or not their work time is logged on a:
- Remote access clock-in system;
- Time card; or
- Sign-up sheet.
Compensable work hours for an employee include the employee’s first work-related activity on a work day to the last work-related activity that the employee completes on that work day. Under the FLSA, it is illegal for the majority of employees to work off the clock.
There are laws that protect hourly workers from being expected to work without pay. If an individual is a non-exempt hourly employee and they are being asked to work off the clock without compensation, they should contact an attorney.
Establishing a Claim Under the FLSA
In order to establish an off the clock work lawsuit, an employee will have to prove the following:
- The employee had worked off the clock hours for which they had not been credited;
- The employer suffered or permitted the employee’s work; and
- The employee suffered monetary damages.
In order to prove they should be compensated for their unpaid wages for off the clock work, the employee may use the following:
- After-hours records, such as:
- phone calls;
- emails; and
- security camera captures;
- Sign-in and sign-off records, including records of parking or building entry and exit; and
- Confirming the stories of fellow employees who also observed off the clock work.
What Are Other Common Employee Compensation Disputes?
The most common employee compensation disputes arise as a result of wage and hour issues. These types of disputes may include:
- Withholding pay;
- Disputes regarding overtime pay; and
- Disputes that involve minimum wage or other pay rates.
Other common types of employee compensation disputes may include:
- Disputes over medical leave and other benefits;
- Retirement and severance package disputes;
- Conflicts related to workers’ compensation for on the job injuries;
- Insurance disputes;
- Spousal benefit claims;
- Not paying an employee the agreed-upon salary or hourly wages;
- Not paying the employee at all;
- Not paying the employee at the times agreed on, for example, biweekly or monthly;
- Not paying the employee their vacation or sick pay;
- Unpaid overtime; and
- Unreimbursed business expenses.
Employee paychecks being docked, delayed, or late are also a common concern. It is important for all employees to review the employment contracts and other related documents to ensure that their contract clearly states when they will receive their paychecks and when their wages may be docked.
It is important to note that an employee’s pay cannot be docked for issues such as bad reviews or poor work performance. Docked pay usually only occurs if it was shown that the employee stole from their employer or that the employee broke products or equipment.
In many cases, an employee must receive notification if their pay will be docked prior to it happening. Additionally, if the employer wants to dock the employee’s pay because of a stolen product, they must first prove that a theft actually occurred.
What Are Other Issues that Arise Because of Compensation?
The Family and Medical Leave Act (FMLA) will protect the job of an eligible employee who is working for a covered employer if they take qualified medical or family leave. Employees are entitled to take this leave and employers are prohibited from using the employee’s absence against them.
Additionally, while on leave, an employer is required to continue to provide group health coverage for that employee. Employers may violate the FMLA rights of employees if they:
- Fire, reprimand or discriminate against the employee;
- Retaliate against the employee;
- Failure to notify the employee of their FMLA rights;
- Unlawfully share confidential medical information;
- Eliminate their health benefits; or
- Force an employee to continue to work even though they are on leave.
If an employee’s rights under the FMLA have been violated, they can file a complaint against their employer. The penalty for a violation of the FMLA may be serious for an employer and may include payment of lost wages and benefits to the employee and equitable relief.
Equitable relief may include reinstating the employee to the same or a higher employment position.
Seeking an Attorney’s Help
If you believe you are not being fairly compensated by your employer, it may be helpful to consult with an off the clock work attorney. Your employment lawyer can assess your case and determine if your work is not being fairly compensated by your employer.
If so, your attorney can help you file any complaints necessary with the proper agencies and file a lawsuit, if necessary.
