What is unpaid overtime? First, overtime is what you earn per hour when you exceed a certain amount per week. Ideally, any hour after 40 hours a week is billable for overtime which is your hourly rate and half. So if you’re making $15 an hour, you’re entitled to $22.50 per hour for every hour you work over your weekly threshold.  

However, overtime is not a one-size-fits-all policy, so not everyone is eligible. It depends on how much you make in a given week or year, your type of job, and your hierarchy and duties. So who is eligible for overtime? 

The first test is how much you earn. According to the Department of Labor, you’re eligible for overtime if you make less than $455 per week or $23,000 per year. Does that mean that anyone that earns below that amount is eligible? And does it completely exempt those that make higher?   

Not quite. You still need to pass the second test: the duties test. Are you engaging in administrative duties or rendering professional services? For instance, lawyers and doctors are exempt from overtime even if they earn less than $15,000 a year. The vital thing to keep in mind is that the eligibility for unpaid overtime is on a case-by-case basis. 

What do you do if you believe you’re a victim of unpaid overtime? How does an unpaid overtime lawsuit play out? What can you gain from it? Learn more in this episode of the David vs. Goliath podcast with elite personal injury lawyer Matt Dolman and his guest, Trescot Gear, Esq.  

In this episode: 

• [00:49] Matt Dolman welcomes his guest, Trescot Gear, Esq, and the topic of the day: unpaid overtime 
• [01:22] What is unpaid overtime? 
• [02:32] Who is exempt and non-exempt from overtime? 
• [05:12] If your duties at work are constantly changing, how do you determine if you’re non-exempt or exempt from overtime? 
• [05:44] What are your rights, and what can you do if you’re a victim of unpaid overtime?
• [07:33] How an unpaid overtime suit plays out 
• [10:33] What you can gain from an unpaid overtime lawsuit 

Transcript

Welcome to episode number 10 of the Dolman Law Group Podcast. I’m Matt Dolman, principal owner and managing partner of the Dolman Law Group here in Clearwater, Florida. Today I have my employment law attorney at our firm, Trescot Gear, Mr. Gear, say hello to our audience.

Matt, how’s it going?

It’s going great. Splendid day here in Clearwater. It’s beautiful outside. We’re going to discuss unpaid overtime today. Take us through what exactly is, first off, what is unpaid overtime? I understand as a concept is pretty self-explanatory, but who is really eligible for it, and when do you really have a case?

Can I go with a bird’s eye view of unpaid overtime? Almost everyone generally has an idea of what overtime is. It’s when you’ve worked a certain amount of hours per week, once you exceed that threshold, then you get paid time and a half. You’re making 15 bucks an hour. All of a sudden you’re making 22.50 for those hours over the threshold. Now, most people, if they work over 40 hours week, they’re all of a sudden looking their paycheck and going, “Hey, should I be getting time and a half for all these hours I worked over 40 per week?” Now, over time is not a one size fits all policy. Over time depends on different factors, depends on how much you make in a given year, how much you make in even week, what type of job you actually perform, what are your duties, do you happen to have people who work underneath you? It’s all a very complex pie that needs to be baked. But the first step is determining whether you’re even eligible.

Okay. I know we discussed, before you get into that in a previous episode, independent contractors versus employees. And it’s an important distinguishment in report criteria, and viewing unpaid overtime.

So distinguishment, we talked last time, about 1099 versus W2 employees.

Sure.

Both are technically eligible for overtime, but it just depends on this, what we call, the duties test. I can’t say the blanket statement that, “Hey, if you are an independent end contractor for a machine company that you’re eligible for overtime.” Anymore than I can say that someone who’s a nurse is eligible for overtime. Each different occupation carries its own exemptions and non exemptions. But no, just because you happen to be a certain tax classification, does not eliminate you from the possibility of getting unpaid overtime.

Okay. So what are the classifications? What’s the salary threshold? Who is limited?

So typically, according to the Department of Labor, which is the federal agency that regulates overtime in wages, you have to have made less than $455 per week, which averages out to about $23,000 or so per year. At that point, you are eligible for overtime. Any hours over 40 per week, you get time and a half. And that’s over 40 per week. Employers sometimes will try and get dodgy with it, and try and claim it’s 80 hours over two weeks. But no, each independent work week, the 168 hours in a given week are treated as independent units for the purposes of counseling overtime. If you happen to make over that amount, it doesn’t mean that you’re ineligible for overtime, but it then goes to a different test. It’s the administration professional and other kind of exemptions.

This basically means that if you are, for instance, a lawyer doctor, we just had a doctor on the last podcast. He is completely ineligible for overtime, no matter if he made $15,000 a year or he made $150,000 per year.

Okay.

If you are a professional employee, or you have known your business, whatever the case may be, you are not eligible for overtime. Your employer can work you to the limits of the law as long as he’s paying you the reasonable wage, which in this case, minimum wage is about $7.30 right now, as long as you’re being paid at least minimum wage. And as long as you’re at least getting a 12 hour non continuous break every seven days, you’re all good from that front as an employer.

But when you are a person seeking unpaid overtime, you have to look and see, are you in position in your company where you are managing people? Are you the head of a department? Or if you’re not the head of a department, do you have a series of people who are answering to you? Who are at your beck and call so to speak. The law is going to say that you are not eligible, you are exempt, and the word is exempt.

So, do you have subordinates?

Yes. You’re going to be likely to be exempt. I can never say 100% certitude, because each case has it’s own unique… It’s why you should come to Dolman Law Group, we’ll go through exactly what you do every day, determine the validity of your claim. But it’s likely that you’re going to be exempt. And that’s the key. As opposed to saying eligible, or non, we say exempt and non-exempt when it comes to overtime parlins.

Okay, what are my rights? So I’m a victim of not being paid properly my overtime wages, what can I do? What’s the steps in the case? What am I looking at?

Well, so the first step, obviously you consult an attorney on the matter. If the attorney feels as though there is a viable case, you can pull up to three years back of overtime. So say you want to file a case on June 1st, 2018, June 1st is coming up in about a month in change. You can pull any unpaid overtime to June 1st, 2015. If it’s found that your employer was willful, or almost criminally negligent and failing to provide you with the rightful overtime, usually it’s going to be two years back. We typically say, it’s hard for you to claim that your employer has been that evil, so to speak in preventing you from achieving the overtime. Most employers are going to claim that they had no idea. But willful ignorance of the law is not defense of the law.

It’s not a defense, yes we know that.

Matt knows that firsthand. So you probably get about two years pulled back for the time that you file your lawsuit, which is why times of the essence. Every day that you delay, may be costing you a 100 bucks, 200 bucks at a time. So what you’re looking at, is you’re looking to file usually in federal court because it’s a violation of the FLSA, which is a Fair Labor Standards Act. That’s a federal law that protects people from minimum wage violations and unpaid overtime violations. The beauty about filing under the FLSA, and we love this word, is attorney’s fees. There’s an attorney’s fees provision inside the statute.

That’s how we get paid.

Exactly. And there’s also liquidated damages, which are also the chi ching word for any attorney.

Oh yeah.

It’s liquidated damages, which are double the usual damages that you are seeking in this action. You can also potentially get punitive damages. You’re almost never going to get punitive damages. That’s the equivalent of an employer knowing that they violated the DOL, and then just throwing that book in a furnace, and claiming that-

So it must be egregious?

Yeah, it must be completely egregious. So you’re almost never going to get that. It does stand to gain that there is some good stuff to get from an unpaid overtime suit. Now, when you file the suit, the employer’s going to say two things, they’re going to claim either that you were an exempt employee all the time and therefore your case has no merit, or in the more likely situation, they may agree that they owe you overtime, but the hours you’ve alleged are different. The problem that a litigant comes into play here, they don’t usually have access to all their time sheets, all their time cards, all their stubs. So they have to estimate initially how many hours.

How off are they, usually?

I’ve litigated nine different cases in federal court right now, and they’re usually off by 200 to 500 hours, which could be in the $10,000 to $15,000 range of error.

The undervalue or overvalue?

They almost always over overvalue.

I would assume it’s.

Yes, they almost always overvalue. They’re always going to look at it and go, “Oh, well, I must have worked 55 hours for each of these last 52 weeks.” And really it was more like 47 hours. So the employer, once you file court.. You often just file lawsuit just for discovery purposes, because in any expedited scheduling order from federal court, the judge will order the time sheets to be released by the employer. And as you may or may not know, federal law requires employers to keep accurate time records for their employees. So if they don’t keep accurate time records, that’s a point in favor of the litigant in this case. The good news about filing a lawsuit, 95% of these never go to trial. They get resolved in mediation. The employer does not want to risk that attorney’s fees provision, because if you can claim one hour of unpaid overtime, you as a plantiff party are entitled to attorney’s fees.

Do these ever become class actions if it’s across the board, or this is habitual? I’m sure if they do it to one employee, it’s not the only loan individuals.

No, of course, we go into class actions. What were the terms from law school, numerality, typicality, commonality, all the common claims that predominate. You typically need 25 people for a class.

Correct.

I believe you could enter it, but I’m not going to say that I know for… Or I am 100% certain.

Do these often turn into classes though?

They do in major corporations.

Okay.

Especially if it’s the same class of employee, aka, they are all data encoders, and they all happen to be underpaid by a significant amount. It’s harder in smaller companies where each people have diffuse responsibilities to get a class. But you’ll see a class when it’s a bunch of truck drivers, because drivers are oftentimes eligible for overtime. Laborers are eligible for overtime. People who do non-skilled… I don’t use non-skilled in any sort of pejorative sense. But different kinds of trades are potentially eligible for overtime. As a whole gamut and we, the Dolman Law Group can assist in figuring where you fit in the spectrum.

Case by case.

Case by case.

Okay, so what can be gained from the lawsuit itself?

You can gain compensatory damages, which are the damages to the amount of unpaid overtime you would’ve received, but for filing the lawsuit. You can get your fees and costs covered. You can get your liquidated damages, and the unlikely punitive damages. So say you file a case for $20,000 in unpaid overtime, you could stand to gain upwards of $60,000 once you account for liquidated damages and the fees and costs, et cetera. So it’s probative of you to get this thing filed in an expedient fashion.

Okay.

Because you don’t want to risk…. You’re trying to pull a third year back of unpaid overtime, the employer has now dissolved or been liquidated, or something happened in the billing process, you don’t want to create more hassle for yourself as litigant when you already are in a massive hassle when it comes to federal court litigation.

Sure.

Now there are state overtime laws too. So in Florida, there are also state overtime laws. The way it works is like the supremacy clause of the constitution. The federal government creates a floor of rights. States are allowed to exceed the floor to protect people. When the two laws are… What’s the term?

Conflict.

In conflict, the court will support whichever law grants overtime to the litigant of the two conflicting laws. In Florida, as you can imagine, being an employer friendly state, we don’t have nearly as many overtime protections, which is why you have not just file under federal law. Federal law gives you the greatest suite of rights available to you.

And do they ever fight federal court or transfer venue?

I almost never see it removed in a state, to state court. Once you file federal, employers like that only because-

Expedited.

It’s expedited, it’s a lot more professional in federal court. The judges let the attorneys do all the leg work, so to speak. But there’s no BS in federal court.

Yes.

You don’t see the games that… Half my opposing council are now just playing games day to day.

In state court, yeah.

In state court. It drives me insane.

Yeah. Federal court’s a lot more strict.

Yes.

Well, I appreciate it. We pretty much ran the gamut of everything we need to know about unpaid overtime or at least what our consumers will need to understand in order to decipher if they have a potential case, or potential claim, how do we reach you?

You can reach us either through the Dolman Law online portal in which you can talk to a Dolman representative, suss out if you may have a case. We usually provide free consults for unpaid overtime here at the Dolman Law Group. My personal number is 855 gear law. You can reach me at gearlawllc.com as the Of Counsel attorney here. And we stand by ready to assist.

Well, thank you again for listening to episode number 10 of the Dolman Law Group Podcast. I’m Matt Dolman. That was Trescot Gear. Have a great day.

Thank you, sir.