In an effort to save money, employers sometimes use reimbursements for expenses as a means to supplement the hourly wages of their hourly employees. These expenses include things such as rent for a home or apartment, travel to and from the workplace, cell phones, internet service charges, meals, and student loan payments. Employers provide these reimbursements instead of paying employees a higher wage in order to save money on taxes. Employers also do not factor in these reimbursements when calculating your overtime wages, paying you only 150 percent of your normal hourly wage. If you receive regular reimbursements for expenses, your employer may owe you additional overtime wages. Your employer may also be putting you in a difficult situation with the Internal Revenue Service.
What Reimbursements Are Improper?
Some employees spend a considerable amount of time working away from home, including salespersons, employees in the construction industry, and employees in the energy industry, to name a few. If you work away from home, your employer can legitimately reimburse you for living expenses, travel expenses, and meal expenses you incur while traveling for your employer’s benefit. In such a case, those reimbursements are not counted as part of your wages for calculating overtime.
However, if you work and live in the same area, you have not incurred any expenses on your employer’s behalf. Travel to and from work is not an expense you incur on your employer’s behalf when you live and work in the same general area. Rent is not an expense you incur on your employer’s behalf when you live and work in the same general area. Therefore, if you return to and from home every day after work, travel, meal, lodging, and other expenses are not properly reimbursed to you because you normally incur those expenses for your own benefit.
What Does That Mean For You?
Regulations implementing the Fair Labor Standards Act (FLSA), which guarantees minimum wage and overtime pay to certain workers, provide that if your employer regularly reimbursements for expenses you normally incur for your own benefit, that amount should be considered part of your wages, and should be considered when calculating your overtime pay. For example, if you normally earn $10.00 per hour, but your employer also provides you with $200.00 per week in reimbursements, your overtime rate should be $22.50 per hour, not $15.00 per hour. If your employer has failed to pay you all overtime you are owed, you may be entitled to collect the difference between what you were paid and what you were owed for a period of up to 3 years, and an additional amount in liquidated damages.
What Should You Do Next?
If you believe you have been improperly denied overtime pay, contact the Cincinnati employment lawyers at Robert A. Klingler Co., L.P.A. One of our lawyers can help you determine what overtime compensation you may be owed. Our lawyers are experienced in pursuing claims for unpaid overtime and can assist you in pursuing your rights and collecting wages your employer or former employer owes you. Give us a call today.