Defending Your Right To Fair Payment
When employees see fewer employment options for themselves outside of their current work situation, they may also find themselves called upon to put in hours in excess of the legal limits put in place by our legislatures. As a result, employees find themselves in unsustainable work situations, working extra hours for little or no pay, and feeling powerless to do anything about it.
Misclassification Cheats Employees Out Of Wages
Other employees can be victimized by having their jobs misclassified as salaried (exempt) when they should instead be classified as hourly (nonexempt), resulting in lost overtime pay. Additional lost compensation may include unpaid commissions, bonuses, unpaid vacation time and the simple nonpayment of wages, including a failure to observe minimum wage laws. If you are a salaried employee who does not manage anyone beneath you, your job may, in fact, be misclassified and you may be losing wages to which you are entitled.
Courts and the IRS use the “Right of Control” test and Colorado’s strict “Economic Realities” standard to determine true status. Key red flags suggesting misclassification include mandating specific working hours, providing company equipment or prohibiting the worker from serving other clients.
Misclassification puts employers and employees at risk. For employers, this issue could result in severe liability for unpaid overtime, back taxes and statutory penalties. For employees, misclassification strips away protections like unemployment insurance and workers’ compensation.
What Is The Fair Labor Standards Act (FLSA)?
In recent years, employees have gained more legal protections than they ever have had in the past. Nonexempt employees are protected under the Fair Labor Standards Act (FLSA). Essentially, the FLSA ensures that employees are paid appropriately for their work. This legal guideline holds employers accountable for paying the appropriate minimum wage as well as overtime.
There are numerous reasons that an FLSA dispute can arise, including:
- Improper classification, which can also lead to:
- Treating employees as contractors
- Paying hourly workers a salary
- Minimum wage violations
- Employers who expect “off the clock” work
- Failing to pay overtime
At The Litigation Boutique LLC, we have extensive experience representing employees in wage disputes. Additionally, we have provided services in the past geared toward helping employers remain legally compliant. Our experience and thorough understanding of both sides of the dispute are a direct benefit to our clients in FLSA claims.
Overtime Rules Employees And Employers Should Know
Many employers mistakenly believe that paying a “salary” automatically negates overtime rights. It does not. To classify an employee as exempt, they must satisfy three strict tests under the Colorado Overtime & Minimum Pay Standards (COMPS):
- Salary level: They must earn above the state threshold of $56,485 for 2025.
- Salary basis: They must receive a predetermined, fixed amount each pay period, regardless of hours worked.
- Duties test: Their primary duties must be genuinely executive, administrative or professional.
In Colorado, commissions and bonuses are considered wages once vested and generally cannot be forfeited upon resignation. Similarly, vacation pay is treated as earned property. Employers must also pay for off-the-clock work, such as answering emails after hours or performing remote tasks.
Tip pooling is legal, but managers cannot participate. Furthermore, valid recordkeeping is mandatory. Failing to retain payroll records or provide itemized statements could lead to legal headaches in the future.
Call Or Email Our Office For An Appointment
If you have a question about mistreatment in the workplace, call or email our Denver office as soon as possible. We can be reached at 303-578-2833 or by completing our online contact form.