Unpaid Wages

Federal law gives most workers the right to be paid for every hour they work, at minimum wage or above, and at one and one-half times their regular rate for every hour over forty in a workweek. Employers who do not follow these rules owe their workers the missing wages plus an equal amount in liquidated damages. That right belongs to the worker. The employer cannot waive it, and signing a contract giving up overtime does not change the law.

If your employer has not paid you for hours you worked, you may have a claim under the Fair Labor Standards Act. This page explains how unpaid wages cases work and what to expect if you contact me.

What unpaid wages means under federal law

"Unpaid wages" is a broad term. It covers any situation in which an employer has not paid an employee what the law requires. The most common categories are unpaid overtime, off-the-clock work, automatic meal deductions for breaks that were not taken, misclassification as a salaried exempt employee, misclassification as an independent contractor, and pay rates that fall below the regular rate the employer should have used.

People sometimes describe this as "wage theft." The phrase is accurate. When an employer keeps wages an employee earned, the employer is keeping money that does not belong to it. Federal law calls this a violation of the Fair Labor Standards Act and provides specific remedies to the worker.

The most common ways employers underpay

Salary misclassification. Many employers treat employees as exempt from overtime because the employees receive a salary. Being paid a salary does not by itself make an employee exempt. The employer must also show the employee performs exempt duties. Most workers who think they are exempt because they are salaried are actually misclassified.

Independent contractor misclassification. Employers sometimes classify workers as 1099 contractors to avoid paying overtime, payroll taxes, and benefits. The classification on a tax form does not control whether the worker is actually an employee under the overtime law. Federal courts apply a multi-factor economic reality test that looks at the actual working relationship, not the label.

Off-the-clock work. Employers must pay for all hours the employee worked, including time spent preparing for a shift, time spent at the end of the shift completing required tasks, time spent answering work calls or emails during off hours, and travel time between job sites.

Automatic meal deductions. Many employers automatically deduct thirty minutes per shift for an unpaid lunch break. If the employee actually worked through the break, the deduction is unlawful and the employer owes the wages.

Day-rate pay. Workers paid a flat daily rate often work twelve or more hours per day, six or seven days per week. Federal law requires overtime on top of the day rate for every hour over forty in the workweek. Many employers paying day rates do not pay the additional overtime.

Regular rate violations. Overtime is calculated as one and one-half times the regular rate. The regular rate must include non-discretionary bonuses, shift differentials, and most other forms of compensation. Employers that calculate overtime using only the base hourly rate underpay the overtime owed.

How federal law calculates what you are owed

The math is straightforward. For an hourly employee, the regular rate is the hourly wage and the overtime rate is one and one-half times that hourly wage. An employee earning twenty dollars per hour who works fifty hours in a week is owed forty hours at twenty dollars, plus ten hours at thirty dollars, for total wages of one thousand one hundred dollars that week. If the employer paid only the straight-time amount of one thousand dollars, the worker is owed the missing one hundred dollars in overtime.

Day-rate and salaried calculations use different formulas, but the principle is the same. The worker is entitled to time-and-a-half on every hour over forty, calculated against the worker's actual regular rate of pay.

Liquidated damages. Federal law doubles the unpaid amount. If the employer owes one hundred dollars in unpaid overtime for the week, the employer also owes one hundred dollars in liquidated damages, for total liability of two hundred dollars. Employers can avoid liquidated damages only by proving they acted in good faith and on a reasonable belief that they were complying with the law. Most cannot make that showing.

The two-year and three-year lookback periods

The statute of limitations is two years from the date the lawsuit is filed, or three years if the violation was willful. A willful violation means the employer either knew the conduct violated the overtime law or acted in reckless disregard of whether it did. The three-year period applies in many misclassification cases.

Every week of unpaid wages is its own violation. As time passes, the oldest week of damages falls outside the lookback period and becomes unrecoverable. A week of delay between today and the filing date is a week of damages lost.

What it costs to bring a claim

Nothing upfront. I handle unpaid wages cases on a contingency fee basis. There is no retainer, no hourly bill during the case, and no payment from the client if there is no recovery. If there is no recovery, you pay nothing, not even the costs. My fee comes out of the recovery if the case settles or wins.

What happens after you contact me

The first step is a free consultation. I will ask about your pay structure, your hours, what you did on the job, and how the employer kept time. There is no obligation. If your situation supports a claim, I will explain how a case would proceed and what kinds of recoveries similar cases have produced. If your situation does not support a claim, I will tell you that, too.

Most cases begin with a demand letter to the employer rather than an immediate lawsuit. A significant percentage resolve at that stage, which is faster and less expensive than litigation for both sides. If the employer refuses to make a reasonable offer, the next step is filing suit in federal court.

Frequently Asked Questions

What counts as unpaid wages under federal law?

Unpaid wages covers any situation where an employer has not paid an employee what the law requires: unpaid overtime, off-the-clock work, automatic meal deductions for breaks not taken, salary misclassification, independent contractor misclassification, and regular rate violations. Federal law requires employers to pay non-exempt employees at least minimum wage for every hour worked and one and one-half times the regular rate for every hour over forty in a workweek.

How does the federal overtime law calculate what I am owed?

For an hourly employee, the overtime rate is one and one-half times the hourly wage. An employee earning twenty dollars per hour who works fifty hours in a week is owed forty hours at twenty dollars, plus ten hours at thirty dollars. Federal law also doubles the unpaid amount through liquidated damages. If the employer owes one hundred dollars in unpaid overtime, the employer also owes one hundred dollars in liquidated damages for a total of two hundred dollars.

Can I recover unpaid wages if I was paid as a 1099 contractor?

Yes, when the working relationship is actually employment despite the 1099 label. A 1099 is a tax form, not a legal determination. Federal courts apply the economic reality test, which looks at the totality of the working relationship rather than the label on a tax form. If the overall economic reality is that you depend on the employer rather than operating an independent business, you are an employee for overtime purposes.

How far back can I recover unpaid wages?

The federal statute of limitations is two years from the date you file your lawsuit, or three years if the violation was willful. Every week of unpaid wages is its own violation. As time passes, the oldest weeks fall outside the lookback period and become unrecoverable. Every week of delay between today and the filing date is a week of damages that may be lost. Acting promptly preserves the full recoverable period.

What does it cost to bring an unpaid wages case?

Nothing upfront. These cases are handled on a contingency fee basis. There is no retainer, no hourly bill during the case. If there is no recovery, you pay nothing, not even the costs. The fee comes out of the recovery if the case settles or wins. The first step is a free consultation where I will ask about your pay structure, your hours, and what you did on the job.