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Employee Compensation Disputes

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What is Employee Compensation?

Employee compensation is defined as cash payments and/or benefits that a worker receives in exchange for the services that they provided to their employer. The majority of employees receive wages or salary payments as their main form of compensation. However, employees may also receive other forms of compensation such as health/life/disability insurance, pensions, vacation benefits, and stock options.

Compensation may be divided into two main categories: fixed and variable. Fixed is usually subject to a set rate and includes wages, salaries, and benefits. Variable is often dependent on the employee’s performance, and can include sales commissions, pay bonuses, cash incentives, and other similar forms of compensation. The expected form and amount of compensation is generally stated in the employment contract.

What are Some Common Employee Compensation Disputes?

The most common type of employee compensation disputes are wage and hour disputes. This type of dispute can include withholding pay, disputes over overtime pay, and disputes involving minimum wage or other pay rates. Other disputes may include:

  • Disputes over medical leave and other benefits;
  • Retirement and severance package disputes;
  • Conflicts over workers compensation for on the job injuries;
  • Insurance disputes;
  • Spousal benefit claims;
  • Not paying you your agreed upon salary or hourly wages, or not paying you at all;
  • Not paying you at the times agreed upon (biweekly, monthly, etc.);
  • Not paying you your vacation and/or sick pay;
  • Unpaid overtime; and/or
  • Unreimbursed business expenses.

Late, delayed, and docked paychecks tend to be very common concerns and issues. It’s always important to first read your employment contract/documents to make sure that the contract clearly states when you will get your paychecks and when your wages can be docked.
 
Keep in mind that your pay cannot be docked for poor work performance or a bad review. Docked pay typically only occurs if it was proven that the employee stole from the employer or that the employee broke product/equipment. Typically docked pay must be notified before it occurs and if an employer wants to dock pay due to stolen products, then they must first prove and establish that it occurred.

What are Some Compensation Dispute Lawsuits Involving Wage and Hour Claims?

Employment compensation lawsuits can vary and many involve wage and hour claims. Most wage and hour claims include:

  • Minimum Wage: Not paying the employee the minimum wage as required by federal and state law.
  • Exemptions: Certain categories of employees are exempt from overtime pay laws. This means that they are not entitled to overtime pay.
    • Some employers make the mistake of classifying some or all their employees as exempt, when they really aren’t. Others wrongly classify employees to avoid paying them more, which is illegal.
  • Job Title vs. Actual Duties Performed: Most FLSA provisions are based on the actual duties that the employee performs, rather than their job descriptions. This means that the exemptions are based on duties performed and not job titles.
    • A common mistake for employers is to base the employee’s FLSA status on their job title rather than their duties.
  • Working “Off the Clock”: FLSA violations can arise because not all companies operate according to a strict, 40-hour work week.
    • Many businesses and employees are under “alternative weeks” (4 day work weeks or 10 hour days, etc.). Some employers don’t include business meetings as part of the “work day”.
  • Withholding of Wages: These claims involve an employer wrongfully withholding an employee's payments. The reason for withholding wages must be illegal, such as discrimination, or in retaliation.

What are Some Ways to Resolve an Employee Compensation Dispute?

In some cases, a dispute over employee compensation may be resolved through the company’s human resources department. This can often help to sort out a minor disagreement or a clerical error.

More serious violations and disputes may require an investigation by a government agency such as the EEOC, especially if the dispute in question involves allegations of discrimination. Under the Fair Labor Standards Act (FLSA), there are a number of different ways that you can recover wages owed to you. You can:

  1. File a claim with your state labor commissioner; and/or
  2. File a private lawsuit against your employer to recover unpaid wages and possibly other damages.

The remedies that may be available if you are successful in a wage and hour claim against your employer are:

  • Recovery of all unpaid wages for hours you worked;
  • Recovery of any unpaid overtime;
  • Punitive damages or penalty damages; and/or
  • Attorney fees and court fee expenses.

How are Employment Compensation Disputes Proven?

Employment compensation require analysis of many different documents and statements that prove your claim that you were either underpaid or were not paid for the hours that you worked. These can include:

  • Pay stubs;
  • Work logs (input of clocking in/out, etc.);
  • Tax papers;
  • Receipts and other documents; and/or
  • Statements from other co-workers with same issues.

Should I Hire a Lawyer If I Have an Employee Compensation Dispute?

Disputes over compensation can sometimes involve large sums of money. This is especially true if a compensation issue has been going on for several weeks or months. You may wish to hire a qualified employment lawyer in your area if you need help resolving a compensation dispute.

Your attorney can provide you with legal advice for your claim and inform you of your options. If you need to file a lawsuit or an administrative claim, your attorney can represent you and make sure your interests are protected.

 

Photo of page author Ki Akhbari

, LegalMatch Legal Writer and Attorney at Law

Last Modified: 09-03-2018 02:03 AM PDT

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