Employees considering a job offer focus on the salary the employer will pay them. On the other hand, employers consider compensation more broadly, including salary, traditional benefits like health and insurance coverage, pension, holiday pay, sick leave, and vacation.
Employers may also consider other fringe benefits like gym access, moving expense reimbursement, or carpooling services. These are just some of the standard extras that employees have come to expect as compensation, but there may be additional items based on the nature of your work.
For example, company executives may be offered high stock options or bonus incentives as part of their compensation packages. Because of the broader compensation package that employers offer, they may justify paying a lower salary for a job.
Some benefits are required by law, and some benefits are negotiated between employer and employee. It is important that you understand your compensation package fully to identify when an employer denies you compensation to which you are entitled.
What Are Some Compensation Issues That May Arise?
Conflicts may arise between employer and employee relating to compensation, particularly salary and benefits. Issues often concern nonpayment or underpayment for overtime work, denial of benefits, or rejection of employee requests for time off from work for medical issues.
Wage and Overtime Work
The Fair Labor Standards Act provides that certain employees are entitled to wages above their regular rate for working over the traditional number of hours in their work week. In many industries, 40 hours is a typical work week. These additional hours are considered overtime, and the employee is entitled to extra wages no less than time and a half of their regular pay rate.
For example, a qualified employee is asked to perform additional work five hours above their normal work week of forty hours. Because they have worked forty-five hours instead of forty hours, they are entitled to overtime wages at 1.5 times their normal hourly rate of $20. The employee should be paid $20 per hour for the first forty hours and $30 per hour for the five hours that count as overtime.
The U.S. Department of Labor regulations states that all employees who earn less than $455 per week or $23,660 per year are automatically entitled to overtime pay. Employees who earn more than that amount are exempt from overtime requirements if they are compensated on a salary and not an hourly basis.
Employees whose jobs fall into one of the following categories are also exempt from overtime requirements:
- Executive: primary duties involve office or non-manual work directly related to the management of the employer’s operations
- Learned professional: primary duties involve the performance of work that requires advanced knowledge in a field of science or learning
- Creative professional: primary duties involve invention, imagination, originality, or talent in a field of creative or artistic endeavors
Employers have a clear mandate on what they must pay for overtime and when they must pay for overtime. Nonetheless, disputes arise when employers avoid paying overtime wages to which an employee is entitled. Failure to pay overtime wages violates the FLSA, and the employer can be penalized for noncompliance.
Family and Medical Leave Act
In a nutshell, the federal FMLA protects eligible employees working for covered employers when they take qualified medical or family leave. The employee is entitled to take the leave, and the employer cannot use the employee’s absence against the employee. While on leave, the employer must also continue group health coverage for the employee.
Employers violate the FMLA rights of their employees if they:
- Fire, reprimand or discriminate against the employee;
- Retaliate against the employee;
- Fail to notify the employee of their FMLA rights;
- Unlawfully share confidential medical information;
- Eliminate their health benefits; or
- Force them to continue to work even though they are on leave.
An employee whose FMLA rights have been violated may file a complaint against the employer. The penalties for violating the FMLA are serious for the employer. They may include payment of lost wages and benefits and equitable relief, such as reinstatement to the same or a higher position.
What Are Minimum Wage Requirements?
Federal law requires that most employees receive a wage of at least $7.25 per hour. Some states have set the minimum wage at a higher level. In such states, the higher minimum wage applies. There are some exceptions to minimum wage laws.
Federal law and some state laws allow employers to pay lower minimum wages to employees under twenty years of age. This lower wage rate is sometimes called a training wage or a youth minimum wage. Federal law sets this lower minimum at $4.25 per hour. This lower wage can only be paid for the first 90 days of employment. Employers cannot do anything that displaces one worker who is paid more to pay another worker the lower wage.
Under federal law, employees who regularly receive tips as part of their pay also get a minimum wage of $2.13 per hour. To have this exemption apply, employees must regularly receive more than $30 per month in tips and be allowed to keep all tips earned. Tips plus wages must add up to at least the $7.25 per hour minimum wage. If tips plus wages do not equal $7.25 per hour, the employer must pay the difference in wages.
Federal and state laws mandate that certain employees are exempt from the minimum wage requirement, such as administrative, professional, executive, and outside sales employees. Additionally, federal and state laws provide additional exemptions from the minimum wage for employees who are full-time college students, workers on some farms, or employed in fishing enterprises.
Entitlement To Benefits
Because some benefits are negotiated for, and some are required under law, the issues that arise may vary. For example, say a pregnant woman is denied maternity leave by her employer. The employer may have violated the FMLA. In another example, an executive is denied stock in the company even though the company’s employment contract entitles the executive to receive such stock. The executive may sue the company under the employment contract.
In another example, you are a full-time employee injured while performing your job-related duties at a construction site. You suffered serious back injuries and cannot continue to do your job. Your employer has told you that you were injured while performing unauthorized work, so the accident was your fault. Moreover, the employer refuses to provide you with the proper insurance claims forms to file for workers’ compensation. Worker’s compensation is state-mandated insurance that may be available to you, notwithstanding your employer’s statements or actions to the contrary.
Note that each state may have its own specific provisions regarding pay and benefits. For instance, California pay and benefits laws may have different requirements than other states.
Do I Need an Lawyer for Disputes Over Benefits with My Employer?
Despite the best of intentions between employers and employees, disputes may arise. Suppose you are an employee who believes your employer has failed to provide you with overtime wages to which you are entitled, has discriminated against you because you have taken an FMLA leave, or has violated other laws. In that case, you should consider consulting a workers compensation lawyer.
