For many IT professionals, the aspect of working as an exempt employee or a non-exempt employee, when it comes to compensation, is often fuzzy as most don't spend time investigating their employment rights and the state and the federal laws that come into play.
Simply, exempt employees are not paid for hours worked beyond the traditional fulltime workweek as they are employed in designated management roles.
Non-exempt employees, by both federal and state laws, are eligible to be compensated for time beyond the fulltime workweek.
A lack of knowledge on the exempt issue can prove financially damaging for those eligible for overtime pay as they either don't get paid for the additional time, or are compensated inaccurately due to incorrect payroll formulas.
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The issue hits home in tech programming fields as companies often hire computer programmers on an "independent contactor" status. This designation has specific eligibility requirements under Federal law. Typically, independent contractors work for various clients, often simultaneously, and are licensed as a business entity. Under these requirements independent contractors are not entitled to overtime pay.
The problem comes in, though, when employees are hired to work for just one company that then designates them as an "independent contractor." In this scenario, the employee is considered exempt with regard to overtime compensation, but are actually non-exempt employees who should be receiving overtime pay.
It's a growing employment issue in California, which is home to dozens of technology employers, as the state provides a very generous labor law protecting non-exempt employees.
"In California the bottom line is whether an employee is a business with multiple clients or someone who works for one company as a contractor, the overtime protections still apply. Some employees are working 70 hours a week but the extra hours are not being paid in overtime compensation," says Thomas Emmitt, senior labor attorney at United Employees Law Group, PC, based in Long Beach, California.
Although Federal labor laws require overtime pay for eligible employees who work more than 40 hours a week, in California overtime pay must be calculated on a daily basis " requiring companies to pay for overtime after an eligible employee has worked more than eight hours in a single day.
State labor laws also require in 2006 that if a California computer professional earns less than $47.81 per hour or the annual salary equivalent of approximately $99,445, they may be entitled to overtime pay. Claims for overtime may be asserted for the past three and sometimes four years of employment.
"The illegal employment practice is a nationwide issue," says Emmitt, though pervasive within the tech industry. Several law firms have initiated class action suits on behalf of employees and companies sued are litigating the cases aggressively as they realize the economic impact of being found liable.
"There are hundreds of thousands of employees who are not being paid properly by companies," says Emmitt, who advises tech workers to determine their status with their employer and investigate whether they are getting compensated properly. If a contract programmer believes he or she is not being duly compensated for overtime a good first step is to consult with an attorney.
"They should also begin keeping a log of hours worked, when they took lunch, when they took breaks and hang onto all work documentation such as pay stubs," says Emmitt.
Then, adds the lawyer, claimants should be prepared for the legal process, which can be slow.
"You need patience to pursue this type of litigation as it's not an overnight process," notes Emmitt.
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