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LinkedIn's employees' paychecks were wrong. Is yours?

LinkedIn just agreed to pay almost $6 million in unpaid overtime and damages, in a settlement after an investigation by the U.S. Department of Labor.

So, if a big company with over 5,000 employees and a human resources department can make a mistake on so many paychecks, is your paycheck correct? Here are some things to look for.

Are you eligible for overtime?

In almost all jobs, if you're paid by the hour, you're eligible for overtime pay when you reach 40 hours in a single week. (In some states, you're eligible if you work more than 8 hours in a single day.) Your boss can't give you "comp time" instead of overtime, even if you ask for it.

Even if you're salaried, you may be still eligible for overtime if you're not "exempt" (see below). In this case, you'll receive the same paycheck if you work 35 hours or 40 hours in one week, but if you work 41 you're eligible for overtime for that hour.

There are some farm, IT and home worker jobs that are exempt from the overtime qualifications, but in most cases, if you're paid by the hour, you're eligible.

Here are some times your paycheck may be wrong.

  • If you worked more than 40 hours a week and not receiving overtime pay (time and half), your paycheck may be wrong.
  • If you're working off the clock, even voluntarily, your paycheck may be wrong.
  • If you're clocking out for lunch, but still doing work, your paycheck may be wrong.
  • If your state has minimum hour laws (that is if you come in, you're guaranteed at least 3 hours of pay) and being paid less than that, your paycheck may be wrong
  • If you're not clocking in and out correctly, your paycheck may be wrong.

Are you "exempt" from overtime?

You've probably heard the word "exempt" to mean salaried, which means you are paid the same amount of money regardless of how many hours you work in a pay period. What the term "exempt" means is that you are exempt from the Fair Labor Standards Act (FLSA), which requires overtime. However, your boss cannot just assign you to be exempt, even if you want to be, if you don't meet the correct criteria.

What are the criteria? Well, they can be a bit complicated, but there are a few basic things that qualify you as exempt:

  • You manage two or more people, with hire/fire/discipline/promotion power.
  • You work independently, which includes decision making powers. Project managers, for instance, don't manage people, but can be exempt.
  • You have a "professional exemption." If you're a lawyer, a Certified Public Accountant, engineer, or other highly educated professional.
  • You are doing non-manual work that relates directly to the running of a business. Human resources, finance, and other people who work independently fall under this.
  • You're an "outside" sales person. That is, you're not sitting in a call center, but going out and meeting with customers. (Although some work, of course, can be done on the phone.)

You also must always have a weekly salary of at least $455. And how might your paycheck be wrong if you're exempt? If your paycheck isn't the same amount each week, excluding bonuses, your paycheck is wrong. Bosses cannot deduct an hour's pay if you only worked 39 hours that week. Doing so automatically makes you eligible for overtime. So, if you have a doctor's appointment on Tuesday and come in an hour late, your boss cannot punish you by changing your paycheck.

There are a few paycheck deduction exemptions, but they involve formal leaves, or absences not covered by a specific sick plan. Your boss can punish you, up to and including firing you for putting in less than 40 hours, but must pay you your full salary. Of course, you don't get paid more when you work more as well. It's perfectly legal (in most cases) to require you to work 50 or more hours for the same pay when you are exempt.

If you don't meet one of the qualifications listed above, you may be misclassified. In this case, you'll be owed overtime retroactively (if you've worked more than 40 hours).

What if your paycheck is wrong?

If you believe your paycheck is wrong, make an a appointment with your human resources department to go over how you were paid. If you believe you're incorrectly classified as exempt, you can ask for your job to be re-evaluated. If they can't explain why you were paid the way you were paid, you can file a complaint with the Department of Labor.

If you don't have a human resources department, talk with your manager, or whoever handles payroll. They should be able to explain clearly how your paycheck came to be.

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