Employment & Labor Insider

The FLSA has been on the books since 1938, and the same core issues -- misclassification, off-clock work, and payroll errors -- keep driving new claims year after year. But what has changed is the environment. Remote work, always-on technology, and state wage-hour laws have made compliance more difficult, even for employers who have never had a problem before.

The stakes are also higher than many employers realize. An FLSA violation can expose an employer to back wages, liquidated damages in an amount equal to the unpaid wages, and attorneys’ fees that may exceed the amount recovered by the employee. Because the FLSA also permits collective actions, one seemingly minor violation can result in significant monetary exposure when multiplied by the number of affected current and former employees.

Here are six of the most common wage and hour violations, with practical steps to address them.

No. 1: Misclassifying employees

The FLSA “default” is that employees are entitled to overtime for any hours worked in excess of 40 during a given workweek. There are a number of exemptions, but they are the exception, not the rule. It is not uncommon for nonexempt employees to be misclassified as “exempt.” And they often work significant unrecorded overtime.

The three most common white-collar exemptions -- executive, administrative, and professional -- generally require payment on a salary basis at or above the minimum, which is currently $684 per week, or $35,568 per year. (“[T]he “salary and salary basis requirements do not apply to bona fide practitioners of law or medicine,” according to the U.S. Department of Labor.)

Each exemption also has a duties test. The job title does not control. For example, a “manager” who doesn't actually supervise employees or direct their work isn't exempt, despite the “manager” title.

Because job duties change as companies grow or restructure, classifications should be reviewed periodically, not set once and forgotten.

No. 2: Off-clock work

Off-clock work often starts small: an employee logs into a VPN before clocking in, answers an email after a shift ends, or works through part of a meal break. Individually, these minutes seem insignificant, but they add up. Even worse, they can support a collective action when the same practice affects many employees.

Generally, a nonexempt employee who performs work must be paid for that time. If the employer knew or should have known that work was being performed, it must pay, even if it did not approve the work.

In a recent Fifth Circuit case, Merritt v. Texas Farm Bureau, the employer won, but the facts show how difficult it is for employers to prevail. In that case, the employee was paid entirely on commission, wasn't required to track his hours, worked without daily supervision, and set his own schedule. Based on these facts, the court found that the employer had no actual or constructive knowledge of the overtime. This is not a typical situation, and employers should not assume it will apply to them.

No. 3: Meal and rest break shortcuts

The FLSA doesn't require employers to provide a meal break, but if an unpaid meal period is offered, the nonexempt employee generally must be completely relieved of duty. If an employee performs any work during that time, including responding to a work call, the time will be compensable.

Automatic meal deductions are technically legal but not recommended, because they assume every deduction was accurate. Employers who use them need to establish a simple way for employees to report missed or interrupted meal periods. That could include a certification process or an exception-reporting form. Managers should be trained not to discourage that reporting. Breaks of roughly 20 minutes or less are generally compensable under the FLSA.

No. 4: Calculation errors and other practices

Overtime is calculated using a nonexempt employee's regular rate of pay, a term of art that includes not just the hourly rate but also non-discretionary bonuses, commissions, and shift differentials, divided by total hours worked in the workweek. A bonus meant as a reward can unintentionally increase the overtime owed for that workweek if the regular rate calculation isn't adjusted accordingly.

Time “rounding” policies have become hard to justify given modern timekeeping technology that may be precise to the fraction of a second. As a result, rounding policies now draw scrutiny from plaintiffs’ attorneys even when neutral on their face.

Employers should also confirm that wages are paid free and clear of unauthorized deductions, that pay card programs don't shift costs to employees, and that final paychecks are issued in compliance with applicable state deadlines. In some jurisdictions, the final paycheck must be issued on the employee’s last day, even if that is not the regular payday.

No. 5: Wage and hour “blind spots” created by remote work

Remote work hasn't changed the underlying obligation to pay nonexempt employees for all compensable time, but it has made that time harder to track. An employee who wraps up a message from home on a Friday evening, or takes a work call while running errands, is performing compensable work outside scheduled hours.

Where an employee is physically located while working also matters. A remote employee based in one state who temporarily works from another, even briefly, may become subject to that state's wage and hour protections. Employers with remote or multi-state workforces should know where employees are actually performing work, not just where they're formally based, and should maintain clear time-reporting and after-hours communication policies.

No. 6: Treating “independent contractor” status as a given

One worker controls the schedule, supplies the equipment, sets the rates, and works for multiple clients. This is a true independent contractor. Another worker reports to a manager, is told how and when to do the work, and works exclusively for one company. The name  “independent contractor” does not resolve the question. Rather, courts and agencies look at who controls the work and how integrated into the business the worker is.

Some states require employers to prove contractor status. Businesses who rely on contractors should periodically confirm that the relationship still reflects genuine independence, particularly when an individual works primarily or exclusively for one company.

State law

Federal compliance is the floor, not the ceiling, in most cases. States such as California, Illinois, and New York impose requirements beyond the FLSA, including different overtime calculations, higher damages multipliers, and more detailed meal and rest break rules. Employers should audit policies against every state where employees actually work, not just where the company is headquartered.

Building a compliance program

None of these risks require a dramatic overhaul. Employers should review exemption classifications regularly; keep timekeeping and payroll policies current, and train managers to apply them consistently; and confirm that practices reflect what employees really do, regardless of what a job description or contractor agreement may say.

We recently discussed these issues in more detail in our webinar, Clocking In on Wage and Hour Compliance: Strategies for 2026. For help with exemption classifications, payroll practices, or multi-state compliance, contact any member of Constangy's Wage and Hour Compliance & Litigation Practice Group.