Minimum Wage Laws and Overtime Pay: How to Calculate What You're Owed - Part 2

Her employer owes $95.85 in base wages (45 × $2.13) plus overtime premium. Her regular rate is $10.76 ($495.85 ÷ 45), making overtime rate $16.14. She should receive $521.55 total. If tips hadn't brought her to minimum wage, the employer must make up the difference. Scenario 2: Retail Worker with Commission James earns $10 hourly plus 2% commission on sales. Working 50 hours with $5,000 in sales, he earns $500 in wages and $100 in commission. His regular rate is $12 per hour ($600 ÷ 50). He's owed $60 in overtime premium (10 hours × $6), totaling $660. Many retailers incorrectly pay only $150 overtime based on the hourly rate alone. Scenario 3: Construction Worker with Piece Rate Carlos installs drywall at $20 per sheet. Installing 100 sheets in 50 hours earns $2,000. His regular rate is $40 per hour. Federal law requires paying the $2,000 piece-rate earnings plus $200 overtime premium (10 hours × $20). Some states require paying 1.5 times the piece rate for overtime hours, which would yield $2,300 total. Scenario 4: Salaried Non-Exempt Employee Nora earns $800 weekly salary for a standard 40-hour week. Working 45 hours, her regular rate is $20 per hour ($800 ÷ 40). She's owed her $800 salary plus $150 overtime (5 hours × $30), totaling $950. If her salary covered all hours worked, she'd receive $800 plus $88.89 overtime premium (5 hours × $17.78 half-time rate). Scenario 5: Multiple Rate Employee David works security, earning $15 for day shifts and $18 for night shifts. Working 25 day hours and 25 night hours, he earns $825. His regular rate is $16.50. He's owed $825 regular pay plus $165 overtime (10 hours × $16.50 premium), totaling $907.50. California would require paying overtime at the higher $18 rate. ### Industry-Specific Wage Violations Healthcare Workers: Hospitals exploit complex scheduling to avoid overtime. "8 and 80" provisions allow 8-hour daily overtime or 80-hour biweekly overtime—but strict requirements apply. Mandatory on-call time, required training, and shift handoffs often go unpaid. Travel between facilities owned by the same employer must be compensated. Retail Employees: "Off-the-clock" security checks plague retail workers. Courts have ruled mandatory bag checks and security screenings may require payment. Commission-based pay doesn't eliminate overtime requirements. "Chinese overtime"—paying half-time for overtime hours to commissioned employees—violates many state laws. Construction Workers: Misclassification as independent contractors runs rampant in construction. Piece-rate pay requires careful overtime calculations often ignored by employers. Travel between job sites during the workday must be paid. "Port-to-port" pay (only paying while at the jobsite) illegally excludes compensable travel time. Agriculture Workers: Farm workers face unique exemptions but maintain important rights. Small farms may be exempt from overtime but not minimum wage. H-2A visa workers have special wage rates above minimum wage. Piece-rate farmworkers must receive minimum wage regardless of productivity. Heat breaks and cool-down periods must be paid. Home Healthcare Workers: Live-in domestic workers gained overtime rights in 2015 after decades of exclusion. Travel between clients must be compensated. Sleep time may be excludable only under strict conditions. Companionship exemptions apply narrowly—most home care requires minimum wage and overtime compliance. ### State Minimum Wage Variations Minimum wage rates vary dramatically across states, creating a complex patchwork of requirements. As of 2024, wages range from the federal floor of $7.25 to $17.00 per hour in Washington D.C. Thirty states plus D.C. exceed federal minimum wage. Seven states have no state minimum wage law, defaulting to federal standards. High-cost states lead minimum wage increases. California's minimum wage reaches $16.00 statewide with higher rates in many cities. New York varies by region, with New York City, Long Island, and Westchester County at $16.00, while upstate remains at $15.00. Washington state mandates $16.28, indexed annually to inflation. Many cities and counties set higher local minimums. Seattle's minimum wage reaches $19.97 for large employers. San Francisco mandates $18.07. Denver, Los Angeles, Chicago, and dozens of other localities exceed state minimums. Always verify the highest applicable rate—federal, state, or local. Cost-of-living adjustments automatically increase wages in many jurisdictions. States like Washington, Oregon, and Vermont tie minimum wage to inflation indices. This prevents legislative gridlock from eroding purchasing power. Other states require periodic legislative action, creating uncertainty for workers. Tipped minimum wages create additional complexity. Seven states require full minimum wage before tips. Other states allow tip credits ranging from $0.50 to $5.12 per hour. Employers must ensure tips bring workers to full minimum wage or make up the difference. Many violations occur through improper tip credit calculations. ### Building Your Wage Claim Strong wage claims require systematic preparation. Calculate total unpaid wages including regular pay, overtime, and illegal deductions. Many workers discover thousands in unpaid wages through careful analysis. Include liquidated damages available under federal and some state laws, potentially doubling your recovery. Identify all affected time periods within statutory limitations. Federal wage claims allow two-year lookback (three for willful violations). State laws may provide longer periods—New York allows six years. Don't delay filing as older claims become time-barred. Each paycheck with violations may restart limitation periods. Consider collective action with coworkers facing similar violations. Class or collective actions provide strength in numbers and shared legal costs. Employers take group claims more seriously. Document which coworkers experienced similar violations and gather contact information before relationships scatter. Understand available remedies beyond back wages. Successful claims may recover attorney fees, forcing employers to bear litigation costs. Some states impose waiting time penalties for delayed final paychecks. Others allow recovery of interest on unpaid wages. Penalties for retaliation can exceed underlying wage claims. Evaluate settlement versus litigation strategically. Quick settlements may recover partial wages without lengthy fights. Litigation takes time but may yield full recovery plus penalties. Consider your financial needs, strength of documentation, and employer's violation history. Experienced attorneys can assess reasonable settlement values. ### Protecting Yourself During Wage Disputes Asserting wage rights requires careful self-protection. Continue performing job duties excellently while pursuing claims. Document any changes in treatment, scheduling, or assignments following complaints. Retaliation claims often succeed even when underlying wage claims face challenges. Maintain professional communications about wage issues. Written complaints should state facts without emotional language. Request responses in writing to create paper trails. Avoid threats or ultimatums that could justify termination for insubordination. Let legal processes create pressure, not angry confrontations. Build financial reserves before asserting claims if possible. Employers may retaliate despite legal protections. Having savings reduces pressure to accept inadequate settlements. Connect with community resources for support during disputes. Some organizations provide emergency assistance to workers pursuing wage claims. Know your rights regarding employer requests during investigations. You need not sign away rights or accept quick settlements. Employers cannot require non-disclosure agreements for wage violations. Be cautious about signing any documents without understanding implications. Consult attorneys before accepting any settlement offers. Consider timing strategically. Filing claims immediately before busy seasons may prompt quicker settlements. Coordinating with coworkers multiplies pressure. Some workers wait until finding new employment to reduce retaliation risks. Others file immediately to preserve evidence and assert rights boldly. ### Calculate Your Case: Wage Theft Worksheet Use this worksheet to estimate unpaid wages: Step 1: Regular Pay Calculation - Hours worked per week: _____ - Hourly rate: $_____ - Additional compensation (commissions, bonuses): $_____ - Regular rate (total compensation ÷ hours): $_____ Step 2: Overtime Calculation - Hours over 40 per week: _____ - Overtime rate (regular rate × 1.5): $_____ - Overtime owed per week: $_____ Step 3: Illegal Deductions - Uniform costs: $_____ - Equipment required: $_____ - Cash register shortages: $_____ - Other deductions: $_____ - Total illegal deductions: $_____ Step 4: Time Period Calculation - Weeks affected: _____ - Regular pay shortage per week: $_____ - Overtime shortage per week: $_____ - Total wage theft: $_____ Step 5: Damages and Penalties - Liquidated damages (federal): $_____ - State penalties: $_____ - Interest (if applicable): $_____ - Total potential recovery: $_____ ### Red Flag Alerts: Serious Wage Violations Immediate Action Required: - Paychecks bouncing or consistently late - Employer closing locations without paying final wages - Threats to report immigration status for wage complaints - Destruction of time records after complaints - Demands to return portions of paychecks in cash Systematic Violations Requiring Documentation: - Automatic meal deductions without breaks provided - Time clocks that round down but never up - Managers altering time records to reduce hours - Composite rates used to avoid overtime - Requirements to work off-the-clock Industry-Specific Red Flags: - Restaurant: Managers participating in tip pools - Retail: Unpaid security checks or meetings - Healthcare: Unpaid on-call time or training - Construction: Cash payments with no records - Home Care: Live-in workers paid flat daily rates ### Success Stories: Workers Who Won Maria, a restaurant worker in California, discovered her employer illegally included managers in the tip pool. After documenting the practice for six months, she filed a wage claim. The state labor commissioner awarded her $8,500 in stolen tips plus $8,500 in liquidated damages. Her courage inspired 12 coworkers to file similar claims, recovering over $200,000 collectively. James, a retail assistant manager, realized his "salary" of $35,000 didn't exempt him from overtime—he spent 90% of his time doing nonexempt work. Three years of documented 55-hour weeks yielded $45,000 in unpaid overtime plus liquidated damages. His employer reclassified all assistant managers and paid $2.3 million to settle the collective action. A group of construction workers documented systematic time shaving—their employer rounded all time down to the nearest hour. Using personal logs and photos of time clocks, they proved 15-30 minutes stolen daily. The Department of Labor investigation recovered $340,000 for 78 workers and forced the employer to implement proper timekeeping. Home healthcare workers in New York discovered their agency paid straight time for 24-hour shifts, claiming sleep time exclusions that didn't apply. Careful documentation of actual duties during "sleep time" proved continuous work requirements. The resulting lawsuit recovered millions in unpaid wages and changed industry practices statewide. These victories demonstrate that workers who know their rights and document violations can successfully recover stolen wages. Each victory protects not just individual workers but creates precedents protecting entire industries. Your courage to stand up against wage theft contributes to this growing movement for workplace justice. ### Final Thoughts: Your Money, Your Rights Wage theft isn't just about money—it's about dignity, fairness, and the value of your labor. Every dollar stolen from your paycheck represents time away from family, effort expended, and dreams deferred. By understanding minimum wage and overtime laws, you possess powerful tools to ensure fair compensation for your work. The calculations in this chapter may seem complex, but the principle remains simple: you deserve every penny earned through your labor. Whether you stock shelves, serve food, provide healthcare, or build homes, your time has value that law protects. Employers who violate these laws count on worker ignorance and fear to maintain profitable theft. Take time to audit your own paychecks using the tools provided. Share this knowledge with coworkers who may be experiencing similar violations. Remember that pursuing unpaid wages isn't greedy or confrontational—it's simply requiring legal compliance from employers who profit from your work. The next chapter explores your rights to meal and rest breaks, another area where employers systematically violate worker protections. Combined with proper wage payment, these rights ensure you're treated as a human being, not merely a production unit. Continue reading to build your complete understanding of workplace rights.