The housing industry is upside down. There have been so many homes built by the builders that it has resulted in real estate values tumbling. This has resulted in the mortgage companies losing a lot of business as well. Look at the Countrywide debacle. Countrywide was recently purchased (bailed out) by Bank of America. Countrywide and many other mortgage companies sold a lot of sub prime mortgages with adjustable rates and 3 or 5 year balloon payments. We are now seeing the effect of this with the foreclosure industry booming.

What does all of this have to do with overtime?

Well, the builders were working overtime to build the houses fast enough for the mortgage companies to fund these sub prime loans. And the mortgage companies were working their closers, processors, loan specialists, title reviewers, underwriters, loan officers, and other employees almost around the clock to shoulder the massive workload at the height of the real estate boom. Many of the mortgage companies’ employees were paid a salary and no overtime.

It is important to understand that the biggest misconception among employers and employees alike is that being paid a salary means that you are not entitled to overtime. THAT IS NOT TRUE!!! Many employers will tell their employees, “your salaried…you don’t get overtime.”

Employees who are worked like dogs get tired of ”No Overtime” polices fast. Mortgage companies recognized this and would pay SPIFS or some other type of bonus or commission in lieu of overtime. Another thing that we see is that an employer will sometimes entice its employees to work through their lunch by providing a “FREE” lunch and “expecting” you to eat at your desk while you continue to answer the phone (with food particles spewing from your mouth), review documents, review and reply to e-mails, etc…. If you eat a “FREE” lunch and you give your employer an extra 1/2 hour or hour of work, then your lunch is really not free, is it?. Many employers will tell you to clock out for lunch or “show” a lunch on your timecard…and then at the same time you are expected to complete a heavy work load. Employers are not allowed to sit back and reap the benefit of this unpaid work. This is illegal.

If an employee works more than 40 hours in any 7-day workweek, without receiving overtime at a rate of 1 and 1/2 times their regular rate of pay, then there is a violation of the FLSA (Fair Labor Standards Act). Back to the bonuses and commissions. Receiving a bonus or commission is great, but it is hardly ever added into your pay when computing overtime compensation (assuming you are one of the lucky ones and you actually get paid some overtime). The FLSA requires that all performance based bonuses and commissions are added into your regular pay…therefore your overtime rate is naturally higher. Employers fail to do this very often. If this happened to you, then you have a claim for unpaid wages, or unpaid overtime premiums.

Also, regarding the housing industry, there are a lot of “superintendants” who were paid nicely ($50k to over $100k plus bonuses) but who also worked ungodly hours. Believe it or not, some superintendants or project managers may be entitled to overtime, even though they received a high salary. Really, one of the only exemptions that could apply is the Executive Exemption (commonly referred to as the manager or supervisor exemption). In order to fit within the exemption (and thus NOT be entitled to overtime) you must supervise at least 2 full time employees (or the equivalent (1 full time and 2 part-time for example)). If you manage projects or sub-contractors, you probably don’t qualify for this exemption to overtime, especially if your primary duty involved manual labor (like BUILDING the homes).

The bottom line is that both the housing and mortgage industries profited tremendously over the past several years. This profit was not always passed down to company employees. In fact, many employees are exploited and treated unfairly, despite “working their tails off.” If you ever worked overtime in any type of job, you should consult with a wage and hour attorney and have your particular situation evaluated. Some of my largest cases have come from clients who really had no idea of their right to overtime under the law….even if they are paid a nice salary. There are strict requirements regarding one’s salary (generally, you cannot be docked) and one’s primary job duties in order for an exemption to apply to your situation. Take the time to talk to an overtime attorney and see if you may have been exploited by your past or present employer. There are many ongoing class action overtime lawsuits that have been filed in these industries. Class action unpaid wage cases are a very hot topic, especially given the state of the economy. Do your research and see if you may be entitled to overtime….you owe it to yourself.

I recently met a waiter who works for a major seafood restaurant chain here in Florida. Ross has been with his current employer (I don’t want to reveal the true name of this well-known restaurant, so we’ll call it ”The Crusty Crab” or “The Crab” for short)  for over 4 years and is one of its top waiters. For the past 4 years, Ross has earned approximately $100k annually, even though he admitted to me that he only reports less than half of that. Ross works 6 and 7 days a week…he even bragged to me about not having a day off for the past 3 months. Ross works about 70 to 80 hours per week. Despite all of the overtime hours that he works, Ross doesn’t get any overtime compensation. The reason that he does not get OT compensation is because The Crusty Crab does not allow it. Or should I say, The Crab will not pay it. Truth is, Ross can care less because he is still making good money.

Here’s how The Crab and Ross work their magic. The Crab has a “policy” where it will schedule waitstaff to work no more than 40 hours per week. Ross clocks in and out using a swipe card on the cash register. When Ross reaches 6 hours for the day, he’ll “break out” as he calls it. “Breaking out” means that he goes out on break so that he’s off the clock, but he continues to work and wait tables. Ross ends up making alot more money because he does really well with tips (about $40 per hour on the average).

Why does Ross do this and why does The Crab allow this conduct to go on? Well, Ross stands to make an extra $200-$250 over his final 4 or 5 hours and The Crab gets free labor.

What is wrong with this? Well, for starters, it is illegal. Under the Fair Labor Standards Act (FLSA), Ross is supposed to get paid time and a half his regular rate of pay for all hours worked in excess of 40 per workweek. Since Ross is working 30-40 hours of overtime per week, he is owed at least one and a half times the minimum wage (currently $6.79 per hour), or $10.19 per hour. That’s another $300-$400 per week that The Crab should be paying Ross. Ross didn’t realize this, but he really doesn’t care because he’s taking home over $2,000 per week. He’s surprised and he didn’t realize that he was entitled to overtime. He thought that, since he voluntarily worked, he was not entitled to overtime compensation. Under the FLSA, you cannot “voluntarily” waive your right to overtime compensation.

The Crab knows that Ross is working overtime, but it simply turns a blind eye to the situation. The Crab benefits because Ross, who is a great waiter, serves The Crab’s tasty seafare, and it doesn’t cost them a dime. Ross benefits because he is permitted to work and make an additional $800 to $1000 per week.

This practice is very common in the restaurant industry. While Ross’s situation seems a little extreme, there are many waiters and waitresses who work for restaurants that have similar “No Overtime” policies, but not as lucrative as Ross’s job. Many restaurants force their waitstaff to work “off the clock” for tips only. If you are tired of this practice and want to get paid your overtime compensation, you should contact a Wage & Hour attorney in your state. Call me for a free consultation. The attorneys at FloridaWageLaw.com help people from all over the United States.

By the way, if Ross ever decides to pursue a claim against The Crab for unpaid overtime, his claim may be worth upwards over $90,000. Here’s the math: 30 hours of overtime per week at $10.19/hr is $305.70. Under the FLSA, claims can go back as far as three (3) years in some cases. Since Ross works holidays and rarely takes any time off, we can assume 150 weeks times $305.70, which amounts to $45,855. Successful litigants in FLSA cases are entitled to an award of liquidated damages in an amount equal to the unpaid overtime, or another $45,855. Therefore, Ross’s overtime claim would be $91,710. Most people don’t realize the sheer magnitude of an overtime claim that spans over 2 to 3 years.