4 Mistakes That Can Lead to Wage and Hour Disputes

On Behalf of | Apr 27, 2022 | Employment Law

Determining how to pay workers is a complicated issue for employers. Most want to offer competitive wages without overextending themselves, but wage-related decisions can be far more complex than calculating a salary or hourly rate. Mistakes and oversights often occur.

Improper classification

Classifying workers as contractors or employees determines everything from a person’s right to receive overtime pay to tax payment liabilities.

Unfortunately, classification is not an exact science. While there are guidelines to help employers make the determination, there can be gray areas and clarity issues that leave room for error. Should an employer misclassify a worker, that person could file a claim seeking financial remedies.

Inaccurate records

Claims of unpaid overtime, as well as non-payment or underpayment of wages, can arise from an employer’s failure to keep accurate records.

To avoid these claims, diligently record workers’ hours and require pre-approval of overtime so it is clear what work is considered on the clock.

Wage theft

Deducting money from a worker’s paycheck is acceptable only under very specific circumstances. For instance, employers may be within their rights to make deductions for uniforms, union dues and other expenses, so long as doing so does not drop the employee’s rate below the minimum wage.

However, unless proper authorizations are first received, docking workers’ pay for damages or other expenses, or withholding a person’s last check, can be grounds for wage-theft allegations.

Failure to pay minimum wage

Minimum wages vary between states, and they are different for certain parties. For instance, in Minnesota, a large employer must pay workers at least $10.33 per hour; the rate for smaller employers is currently $8.42.

Minimum wage issues can arise when employers do not meet these obligations or are confused about the law regarding tipped workers, youth workers, or other groups.

Proper payment practices

Employers who wish to avoid wage or hour misconduct allegations would be wise to educate themselves on these and other labor law issues. If there are questions or concerns about wage policies, discussing them with an attorney can help clear up confusion and prevent a costly legal dispute.