Underpaid? How to Know if Your Employee Rights are Being Violated

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employee rights federal labor laws

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In the 10 U.S. states with the highest populations, a total of 2.4 million workers lost out on $8 billion in annual earnings as a result of violations of minimum wage laws, according to a 2017 report from the Economic Policy Institute. This equates to around $3,300 annually for year-round workers, which is close to a quarter of earned wages for a minimum-wage worker.

employee rights

Image credit: Business Insider

Minimum wage workers are not the only ones who experience wage theft as a result of employers violating federal labor laws. “There are many different ways an employee may be underpaid,” according to William Tucker, a small business attorney at Gehres Law Group.

Tucker explained employees are underpaid when employers don’t provide proper payment for overtime; when employees aren’t provided with meal breaks and rest periods; when employers don’t provide required wage statements; and when workers are not paid final wages in a timely manner after leaving their jobs.

If you’re an employee and you fear you’re not paid properly, you have legal rights and should not be afraid to raise the issue with your employer or take other steps to pursue a remedy.

“Many states have strong laws against retaliation or discrimination for making an oral or written complaint for wages owed,” according to Darren Lipinsky, a senior trial attorney at Lipinsky Employment Lawyers. “Federal law also protects against such discrimination or retaliation.”

To help ensure your employee rights are being respected, here are a few key things to know about how federal labor laws work to prevent wage theft.

The minimum wage can vary based on where you live and work

Many professional workers have the option to negotiate salary when starting a job to ensure they receive a fair pay based on their skills. There are also specific rules that protect all workers, including those who don’t have a lot of leverage in the marketplace to negotiate their wage. One of those rules relates to minimum wage.

One of the most basic rights of every worker is the right to be paid at least the minimum wage. For many workers, the minimum wage is the federal minimum wage of $7.25 hourly, according to the United State’s Department of Labor.

In 2016, 701,000 workers aged 16 and over were paid the federal minimum wage, while an estimated 1.5 million workers were paid less than the federal minimum, according to the Bureau of Labor Statistics (BLS). BLS explains many of the 1.5 million workers paid under $7.25 hourly are not protected by minimum wage laws because they fall into exemptions, like rules allowing some hand-harvesters to be paid under minimum wage.

Federal labor laws also allow for tipped workers to be paid a lower minimum wage of $2.13 hourly, which is why it is so important to tip service providers an appropriate amount. However, if tipped workers don’t actually make up the difference between $2.13 and $7.25 with their tips received, their employer will have to pay more. It is the responsibility of employers to make sure they are paying the difference if tips don’t add up to at least minimum wage. However, tipped workers should track their tips to ensure they are getting paid fairly and should talk with an employer if their wages fall short.

Tipped workers aren’t the only ones subject to a different minimum wage rule than the federal requirement of $7.25 per hour. Some workers are covered by states and local laws imposing higher wages than this federal minimum.

In California, for example, employers with 25 or fewer employees must pay a minimum wage of $10.50 hourly as of 2018, and employers with more than 25 employees must pay at least $11 hourly. This chart from Kiplinger shows minimum wage in each state relative to the federal wage in 2017.

federal labor laws

Image credit: Kiplinger


The rules for overtime pay

Hourly employees and some salaried workers (workers paid a set amount rather than an hourly wage) generally must not only be paid at least the minimum wage, but employees must also be paid overtime once they exceed a certain number of hours of work per week.

According to the Department of Labor, employees must receive overtime pay once they have worked more than 40 hours in a workweek. A workweek does not have to match up with a calendar week, as any seven consecutive 24-hour periods can be considered a work-week.

Employees must be paid overtime at a rate equal to at least time and one-half their regular hourly wage. If a worker earns $10 per hour, this means his overtime wage would need to be at least $15 hourly ($10 * 1.5). Federal law does not require overtime just because workers are made to come to work on weekends or holidays, unless working on these days pushes the employee over the 40-hour threshold.

Some states require overtime in more situations than federal labor laws. For example, in California, employees are not just entitled to overtime if they work more than 40 hours per week. They are also entitled to overtime if they work more than eight hours in a single day or if they work for seven days in a row.

Some workers are exempt from overtime rules

Both state and federal laws, however, exempt some workers from being entitled to overtime. Workers who may be exempt include outside sales employees, workers in computer-related occupations, executive employees, administrative employees, and professional employees. The FLSA overtime pay calculator advisor allows employers and employees to input information about a position to determine if a worker is potentially exempt.

Generally, if workers make a salary of at least $455 weekly and their job duties mean they fall within one of the above-listed categories of exempt workers, an employer is not required to pay overtime, even if they work over 40 hours weekly.

Job titles alone do not make workers exempt; the key is whether the workers meet the criteria for being a professional worker, administrative employee, or other exempt employee. The specific criteria vary depending on your job. For example, for a worker to be exempt based on being an executive employee:

  • The worker must regularly supervise at least two other employees.
  • Management must be the worker’s primary obligation.
  • The worker must have input into the status of the employees being supervised, such as input into whether to fire or promote an employee.

Unfortunately, there is a big problem with employers incorrectly classifying workers as exempt who shouldn’t be. Employers may classify workers as “professionals” and pay them a salary to avoid paying overtime the employees would receive if they were hourly workers. In 2012, Walmart paid $4.8 million in damages to 4,500 workers because those workers were misclassified as exempt from overtime.

If an employee is incorrectly classified as exempt and not paid overtime, that employee can take action, just as the Walmart workers did, to get back pay that is owed.

The rules for worker pay

In addition to overtime rules and minimum wage rules, there are also other federal labor laws that protect employee rights. For example:

  • You must be paid for all time worked. This includes time spent taking protective gear off and on, as well as all time you are required to be on the employer’s premises or on duty.
  • Uniforms and other items provided by an employer aren’t wages. An employer cannot include the costs of a uniform — or other items provided primarily for the employer’s benefit — as part of wages. If an employer requires workers to pay for uniforms or other materials, the employer is in violation of labor laws if these costs cause wages to fall below the minimum. Employees can make workers purchase their own uniforms as long as doing so would not reduce their pay to below minimum wage.
  • Employers cannot dock wages: An employer cannot cause a worker’s wages to fall below minimum wage by deducting losses from an employee’s wages, such as taking money from a cashier’s paycheck if the drawer is short.

Some states also require employers to pay for meal breaks or other rest periods. For example, in California, workers are entitled to 10 minutes of paid rest for every four hours worked. You can find your state rules for rest breaks on the website of the Department of Labor. Some states also require employers to provide a last paycheck right away for departing workers, but the Department of Labor indicates this is not a federal requirement.

What can you do to protect your employee rights if you’re underpaid?

While there are many employee rights guaranteed under federal labor laws, these rules can be confusing. Many workers aren’t fully aware of what to do if their employer is violating the rules.

Make a written complaint

Lipinsky recommends submitting a complaint in writing to your human resources department or to someone with authority to handle the problem within your organization. He refers to this as “establishing proof of the complaint,” and recommends the written complaint also “document any past oral complaints of wage theft that have unsuccessfully been made.”

Document any attempts at retaliation your employer makes

Employers are not allowed to retaliate against you for exercising your employee rights in connection with unpaid wages. As Lipinsky explains: “Most courts have held that these laws [federal and state labor laws] protect those employees who make internal complaints, not just those employees who complain to a government agency.” If your employer takes adverse action after you make a complaint, document your employer’s actions.

File a complaint with the Department of Labor

If the company fails to respond to an internal complaint or retaliates against a worker for making one, the next step Lipinsky recommends is to file a complaint with the state or federal Department of Labor or other appropriate agency. Both Tucker and Lipinsky indicate that state or federal labor departments can provide advice and will sometimes conduct an investigation and take enforcement action. Tucker advises going in person to the office near you to make your complaint and get help. You can enter your zip code on the Department of Labor website to find workforce services in your area.

Contacting an attorney is also an option, but Tucker warns it can sometimes be difficult to find a lawyer willing to take a case based on underpaid wages. “It will depend on how good a case the employee appears to have and the value of the case,” Tucker says. “In some instances, the case may be a good one, but the value is not high enough for an attorney to take it on.”

If your employer underpaid you by a small amount, like $100, it would not be worth an attorney’s time to take the case. Lipinsky says that working with an attorney could be “particularly useful when a company-wide practice of wage theft has negatively affected multiple employees.” An attorney could help those workers come together to make a joint complaint.

For smaller claims, Tucker suggests small claims court as an option and indicates it may be possible for an employee to collect the full amount owed in small claims court if the employee’s case has merit.

Whether you decide to talk with a lawyer, go to small claims court, reach out to a labor department or pursue some other legal remedy, the key is to know your employee rights and to stand up for yourself if your employer fails to pay you the wages that you deserve.

Interested in refinancing student loans?

Here are the top 8 lenders of 2020!
LenderVariable APREligible Degrees 
Check out the testimonials and our in-depth reviews!
1 Important Disclosures for Earnest.

Earnest Disclosures

To qualify, you must be a U.S. citizen or possess a 10-year (non-conditional) Permanent Resident Card, reside in a state Earnest lends in, and satisfy our minimum eligibility criteria. You may find more information on loan eligibility here: https://www.earnest.com/eligibility. Not all applicants will be approved for a loan, and not all applicants will qualify for the lowest rate. Approval and interest rate depend on the review of a complete application.

Earnest fixed rate loan rates range from 3.20% APR (with Auto Pay) to 6.99% APR (with Auto Pay). Variable rate loan rates range from 1.99% APR (with Auto Pay) to 6.89% APR (with Auto Pay). For variable rate loans, although the interest rate will vary after you are approved, the interest rate will never exceed 8.95% for loan terms 10 years or less. For loan terms of 10 years to 15 years, the interest rate will never exceed 9.95%. For loan terms over 15 years, the interest rate will never exceed 11.95% (the maximum rates for these loans). Earnest variable interest rate loans are based on a publicly available index, the one month London Interbank Offered Rate (LIBOR). Your rate will be calculated each month by adding a margin between 1.82% and 5.50% to the one month LIBOR. The rate will not increase more than once per month. Earnest rate ranges are current as of December 13, 2019, and are subject to change based on market conditions and borrower eligibility.

Auto Pay discount: If you make monthly principal and interest payments by an automatic, monthly deduction from a savings or checking account, your rate will be reduced by one quarter of one percent (0.25%) for so long as you continue to make automatic, electronic monthly payments. This benefit is suspended during periods of deferment and forbearance.

The information provided on this page is updated as of 12/13/2019. Earnest reserves the right to change, pause, or terminate product offerings at any time without notice. Earnest loans are originated by Earnest Operations LLC. California Finance Lender License 6054788. NMLS # 1204917. Earnest Operations LLC is located at 302 2nd Street, Suite 401N, San Francisco, CA 94107. Terms and Conditions apply. Visit https://www.earnest.com/terms-of-service, email us at hello@earnest.com, or call 888-601-2801 for more information on our student loan refinance product.

© 2018 Earnest LLC. All rights reserved. Earnest LLC and its subsidiaries, including Earnest Operations LLC, are not sponsored by or agencies of the United States of America.

2 Important Disclosures for SoFi.

SoFi Disclosures

  1. Student loan Refinance: Fixed rates from 3.46% APR (with AutoPay) to 7.61% APR (without AutoPay). Variable rates currently from 2.31% APR (with AutoPay) to 7.61% (without AutoPay). Interest rates on variable rate loans are capped at either 8.95% or 9.95% depending on term of loan. See APR examples and terms. Lowest variable rate of 2.31% APR assumes current 1 month LIBOR rate of 2.31% plus 0.75% margin minus 0.25% for AutoPay. If approved for a loan, the fixed or variable interest rate offered will depend on your credit history and the term of the loan and will be within the ranges of rates listed above. For the SoFi variable rate loan, the 1-month LIBOR index will adjust monthly and the loan payment will be re-amortized and may change monthly. APRs for variable rate loans may increase after origination if the LIBOR index increases. The SoFi 0.25% AutoPay interest rate reduction requires you to agree to make monthly principal and interest payments by an automatic monthly deduction from a savings or checking account. The benefit will discontinue and be lost for periods in which you do not pay by automatic deduction from a savings or checking account.

3 Important Disclosures for Figure.

Figure Disclosures

Figure’s Student Refinance Loan is a private loan. If you refinance federal loans, you forfeit certain flexible repayment options associated with those loans. If you expect to incur financial hardship that would impact your ability to repay, you should consider federal consolidation alternatives.

4 Important Disclosures for College Ave.

College Ave Disclosures

College Ave Student Loans products are made available through either Firstrust Bank, member FDIC or M.Y. Safra Bank, FSB, member FDIC. All loans are subject to individual approval and adherence to underwriting guidelines. Program restrictions, other terms, and conditions apply.

1College Ave Refi Education loans are not currently available to residents of Maine.

2All rates shown include autopay discount. The 0.25% auto-pay interest rate reduction applies as long as a valid bank account is designated for required monthly payments. Variable rates may increase after consummation.

3$5,000 is the minimum requirement to refinance. The maximum loan amount is $300,000 for those with medical, dental, pharmacy or veterinary doctorate degrees, and $150,000 for all other undergraduate or graduate degrees.

4This informational repayment example uses typical loan terms for a refi borrower with a Full Principal & Interest Repayment and a 10-year repayment term, has a $40,000 loan and a 5.5% Annual Percentage Rate (“APR”): 120 monthly payments of $434.11 while in the repayment period, for a total amount of payments of $52,092.61. Loans will never have a full principal and interest monthly payment of less than $50. Your actual rates and repayment terms may vary.

Information advertised valid as of 1/1/2020. Variable interest rates may increase after consummation.

5 Important Disclosures for Laurel Road.

Laurel Road Disclosures

Laurel Road is a brand of KeyBank National Association offering online lending products in all 50 U.S. states, Washington, D.C., and Puerto Rico. Mortgage lending is not offered in Puerto Rico. All loans are provided by KeyBank National Association.
As used throughout these Terms & Conditions, the term “Lender” refers to KeyBank National Association and its affiliates, agents, guaranty insurers, investors, assigns, and successors in interest.

This term represents the actual cost of financing to the borrower over the life of the loan expressed as a yearly rate.


There are no origination fees or prepayment penalties associated with the loan. Lender may assess a late fee if any part of a payment is not received within 15 days of the payment due date. Any late fee assessed shall not exceed 5% of the late payment or $28, whichever is less. A borrower may be charged $20 for any payment (including a check or an electronic payment) that is returned unpaid due to non-sufficient funds (NSF) or a closed account.


For bachelor’s degrees and higher, up to 100% of outstanding private and federal student loans (minimum $5,000) are eligible for refinancing. If you are refinancing greater than $300,000 in student loan debt, Lender may refinance the loans into 2 or more new loans.
For eligible Associates degrees in the healthcare field (see Eligibility & Eligible Loans section below), Lender will refinance up to $50,000 in loans for non-ParentPlus refinance loans. Note, parents who are refinancing loans taken out on behalf of a child who has obtained an associates degrees in an eligible healthcare field are not subject to the $50,000 loan maximum, refer to https://www.laurelroad.com/refinance-student-loans/refinance-parent-plus-loans/ for more information about refinancing ParentPlus loans.


Borrower, and Co-signer if applicable, must be a U.S. Citizen or Permanent Resident with a valid I-551 card (which must show a minimum of 10 years between “Resident Since” date and “Card Expires” date or has no expiration date); state that they are of at least borrowing age in the state of residence at the time of application; and meet Lender underwriting criteria (including, for example, employment, debt-to-income, disposable income, and credit history requirements).

Graduates may refinance any unsubsidized or subsidized Federal or private student loan that was used exclusively for qualified higher education expenses (as defined in 26 USC Section 221) at an accredited U.S. undergraduate or graduate school. Any federal loans refinanced with Lender are private loans and do not have the same repayment options that federal loan program offers such as Income Based Repayment or Income Contingent Repayment.

All loans must be in grace or repayment status and cannot be in default. Borrower must have graduated or be enrolled in good standing in the final term preceding graduation from an accredited Title IV U.S. school and must be employed, or have an eligible offer of employment. Parents looking to refinance loans taken out on behalf of a child should refer to https://www.laurelroad.com/refinance-student-loans/refinance-parent-plus-loans/ for applicable terms and conditions.

For Associates Degrees: Only associates degrees earned in one of the following are eligible for refinancing: Cardiovascular Technologist (CVT); Dental Hygiene; Diagnostic Medical Sonography; EMT/Paramedics; Nuclear Technician; Nursing; Occupational Therapy Assistant; Pharmacy Technician; Physical Therapy Assistant; Radiation Therapy; Radiologic/MRI Technologist; Respiratory Therapy; or Surgical Technologist. To refinance an Associates degree, a borrower must also either be currently enrolled and in the final term of an associate degree program at a Title IV eligible school with an offer of employment in the same field in which they will receive an eligible associate degree OR have graduated from a school that is Title IV eligible with an eligible associate and have been employed, for a minimum of 12 months, in the same field of study of the associate degree earned.


The interest rate you are offered will depend on your credit profile, income, and total debt payments as well as your choice of fixed or variable and choice of term. For applicants who are currently medical or dental residents, your rate offer may also vary depending on whether you have secured employment for after residency.


The repayment of any refinanced student loan will commence (1) immediately after disbursement by us, or (2) after any grace or in-school deferment period, existing prior to refinancing and/or consolidation with us, has expired.


After loan disbursement, if a borrower documents a qualifying economic hardship, we may agree in our discretion to allow for full or partial forbearance of payments for one or more 3-month time periods (not to exceed 12 months in the aggregate during the term of your loan), provided that we receive acceptable documentation (including updating documentation) of the nature and expected duration of the borrower’s economic hardship.

We may agree under certain circumstances to allow a borrower to make $100/month payments for a period of time immediately after loan disbursement if the borrower is employed full-time as an intern, resident, or similar postgraduate trainee at the time of loan disbursement. These payments may not be enough to cover all of the interest that accrues on the loan. Unpaid accrued interest will be added to your loan and monthly payments of principal and interest will begin when the post-graduate training program ends.

We may agree under certain circumstances to allow postponement (deferral) of monthly payments of principal and interest for a period of time immediately following loan disbursement (not to exceed 6 months after the borrower’s graduation with an eligible degree), if the borrower is an eligible student in the borrower’s final term at the time of loan disbursement or graduated less than 6 months before loan disbursement, and has accepted an offer of (or has already begun) full-time employment.

If Lender agrees (in its sole discretion) to postpone or reduce any monthly payment(s) for a period of time, interest on the loan will continue to accrue for each day principal is owed. Although the borrower might not be required to make payments during such a period, the borrower may continue to make payments during such a period. Making payments, or paying some of the interest, will reduce the total amount that will be required to be paid over the life of the loan. Interest not paid during any period when Lender has agreed to postpone or reduce any monthly payment will be added to the principal balance through capitalization (compounding) at the end of such a period, one month before the borrower is required to resume making regular monthly payments.


This information is current as of November 8, 2019 and is subject to change.

6 Important Disclosures for Splash Financial.

Splash Financial Disclosures

Terms and Conditions apply. Splash reserves the right to modify or discontinue products and benefits at any time without notice. Rates and terms are also subject to change at any time without notice. Offers are subject to credit approval. To qualify, a borrower must be a U.S. citizen or permanent resident in an eligible state and meet applicable underwriting requirements. Not all borrowers receive the lowest rate. Lowest rates are reserved for the highest qualified borrowers.

7 Important Disclosures for CommonBond.

CommonBond Disclosures

Offered terms are subject to change. Loans are offered by CommonBond Lending, LLC (NMLS # 1175900). If you are approved for a loan, the interest rate offered will depend on your credit profile, your application, the loan term selected and will be within the ranges of rates shown. All Annual Percentage Rates (APRs) displayed assume borrowers enroll in auto pay and account for the 0.25% reduction in interest rate. All variable rates are based on a 1-month LIBOR assumption of 1.76% effective November 10, 2019.

8 Important Disclosures for LendKey.

LendKey Disclosures

Refinancing via LendKey.com is only available for applicants with qualified private education loans from an eligible institution. Loans that were used for exam preparation classes, including, but not limited to, loans for LSAT, MCAT, GMAT, and GRE preparation, are not eligible for refinancing with a lender via LendKey.com. If you currently have any of these exam preparation loans, you should not include them in an application to refinance your student loans on this website. Applicants must be either U.S. citizens or Permanent Residents in an eligible state to qualify for a loan. Certain membership requirements (including the opening of a share account and any applicable association fees in connection with membership) may apply in the event that an applicant wishes to accept a loan offer from a credit union lender. Lenders participating on LendKey.com reserve the right to modify or discontinue the products, terms, and benefits offered on this website at any time without notice. LendKey Technologies, Inc. is not affiliated with, nor does it  endorse,  any educational institution.

Subject to floor rate and may require the automatic payments be made from a checking or savings account with the lender. The rate reduction will be removed and the rate will be increased by 0.25% upon any cancellation or failed collection attempt of the automatic payment and will be suspended during any period of deferment or forbearance. As a result, during the forbearance or suspension period, and/or if the automatic payment is canceled, any increase will take the form of higher payments. The lowest advertised variable APR is only available for loan terms of  5 years and is reserved for applicants with FICO scores of at least 810.

As of 12/019/2019 student loan refinancing rates range from 1.90% to 8.59% Variable APR with AutoPay and 3.49% to 7.75% Fixed APR with AutoPay.

1.99% – 6.89%1Undergrad
& Graduate

Visit Earnest

2.31% – 7.36%2Undergrad
& Graduate

Visit SoFi

2.06% – 6.81%3Undergrad
& Graduate

Visit Figure

2.62% – 6.12%4Undergrad
& Graduate

Visit College Ave

1.99% – 6.65%5Undergrad
& Graduate

Visit Laurel Road

1.99% – 7.06%6Undergrad
& Graduate

Visit Splash

1.85% – 6.13%7Undergrad
& Graduate

Visit CommonBond

1.90% – 8.59%8Undergrad
& Graduate

Visit Lendkey

Our team at Student Loan Hero works hard to find and recommend products and services that we believe are of high quality. We sometimes earn a sales commission or advertising fee when recommending various products and services to you. Similar to when you are being sold any product or service, be sure to read the fine print to help you understand what you are buying. Be sure to consult with a licensed professional if you have any concerns. Student Loan Hero is not a lender or investment advisor. We are not involved in the loan approval or investment process, nor do we make credit or investment related decisions. The rates and terms listed on our website are estimates and are subject to change at any time.

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