My Boss Was Crooked! Part II: Something’s Fishy About the Company Overtime Policy

When I left off in Part I I’d picked up a low-stress Day Job working for an online retailer and hooked my brother Kyle and my friend Stu up with jobs at the same company.  I was still keeping mostly to myself since it was only a Day Job and I had more important things to worry about…


One thing I forgot to mention is that in addition to keeping the names of the boss, his company, and everyone who worked there a secret, to further protect the identities of my former coworkers I’ll be masking their genders by using all male pronouns (he, him, his).  So anytime you see “he” in this series the person could very well be a woman….or it could be a man.  The only exception will be the boss’s wife, since she was involved with some seriously uncool stuff and there’s no need to disguise their relationship ;-)

 

The Guy Who Walked Out

When the company hired Kyle as a repair technician they also hired a second technician, a guy in his forties who had a decent amount of experience working with hardware.  Both of them were hired on four-month trial contracts so the boss could evaluate their progress, which seemed reasonable enough.  The other new guy spent most of his first day meeting with the warehouse manager, though one of their conversations took place in our office and caught my attention.  Here’s a paraphrase of how it went:

 

Warehouse Manager: …and then [the boss’s wife] will be here after lunch to do your 1099 paperwork.

New Guy: 1099?  You mean I’m not getting paid on a W-2?

Warehouse Manager (visibly flustered): Ah, well, [the boss’s wife] knows more about that than I do…

Me (jumping in to help): Yes, no worries—she’ll be here soon and can answer more of your questions.

 

The new guy had clearly been taken aback by this, though I was less perturbed—I vaguely remembered from my time working as a tutor that people who get paid on 1099 forms don’t have taxes deducted from their paychecks and have to pay all of their own taxes at the end of the year, but beyond that the specifics were a little hazy.  A 1099 contract seemed like just another way to pay an employee, especially one who might only be around for four months.

The new guy and I didn’t talk much—instead, he had a long conversation with the boss’s wife, and then an even longer conversation with the boss (around a half hour).  Then, he came back to the office, grabbed his things, and walked out.  I never saw him again.

I found out afterward that the guy hadn’t been OK with being paid on a 1099 form, so to avoid another walkout the warehouse manager needed to let Kyle know that he’d also be paid via 1099.  Kyle, who at this point had accepted the job but hadn’t started, grumbled a bit but took the deal, which the boss hadn’t made clear to him when he gave him the offer (he’d instead used the vaguer term “contract employee”).

No one ever brought up the guy who’d left again.

 

How Late Is Everyone Staying?

One thing that had lingered in the back of my mind for months was that every evening I punched out on the company timeclock between 6:00 and 6:05 and I was always, without exception, the first to leave.  I was also one of the last people there in the morning when I came in at 9:00—a few employees came in late, but for the most part everyone else arrived earlier and stayed later than I did, though they never asked for my help or ever insinuated that I should be staying later too.

I’d been told when I signed on that the company paid overtime at the regular time-a-half rate for weekdays and doubletime for weekends, so I figured everyone else just needed money or legitimately had a lot of work to do.  In any case, since I wanted to save every possible moment of my evenings for creative work and wasn’t hard-pressed for cash, I wasn’t about to rock the boat by staying.

One day, though, I decided to run a test: I intentionally stayed late to finish a project, then punched out at 6:27.  When I left it seemed like almost everyone else was still working, but more alarmingly, the extra time didn’t show up on my next paycheck—meaning that the boss’s wife had either made a mistake, or I wasn’t going to be paid for my overtime at all.

After that I went back to clocking out at 6:00 and 6:05 every night.  I wasn’t sure what was going on, but I definitely didn’t want to risk staying without pay.

 

The Holiday Overtime Meeting

In mid-November business started heating up and things got busier.  The holiday rush had begun.

The boss called an all-hands meeting for everyone in the company, something I hadn’t yet seen him do.  He explained that the profitable holiday season was beginning and made clear that he expected all of us to work more hours and contribute more to the team.  (Exactly how many hours, however, was left vague.)  As a reward for our hard work, he said, we’d be given a bonus after the final quarter depending on how well the company performed.

More strikingly, though, the boss declared that starting that day he was authorizing overtime hours, and that overtime would be paid at the rate of time-and-a-half for weekdays and doubletime for weekends, as I’d been told when I started at the company.  There seemed to be nothing wrong with this until he followed it by explaining that during the rest of the year if we couldn’t finish our work by the end of the day, then it was our responsibility, but during the holiday season we were allowed to work extra hours for pay.

This distinction between overtime rules for the holiday season and the regular season immediately set off alarm bells.   For overtime non-exempt employees, I was pretty sure that overtime pay was overtime pay regardless of what time of the year you worked or whether the boss authorized it, so it didn’t make sense for the boss to let overtime hours go unpaid during the slow season.  I remembered my 6:27 experiment a few months back and a lot of things started to make sense.

To clarify, here’s a quick explanation of how overtime works: certain employees, like managers, supervisors, and highly skilled workers (lawyers, computer programmers, etc.) are overtime-exempt workers and don’t have to be paid overtime if they work more than 40 hours, since these positions tend to come with more power and freedom.  Everyone else is overtime non-exempt, which means they have to be paid for overtime regardless of the time of year.  (Check out my more detailed explanation of overtime exemptions here, or better yet, the actual rules of the Fair Labor Standards Act (FLSA) on the US Department of Labor website!)

At our company, the only two people who seemed to be overtime-exempt were the warehouse manager and the computer programmer—no one else had duties that even came close to meeting the exemption requirements.

I didn’t like what I’d just heard, but again, what did I care?  Apart from those twenty-seven minutes, I hadn’t worked any unpaid overtime, and the boss had just confirmed that our overtime for the next two months would all be paid.  I didn’t want to open a big can of worms, especially since I was hoping not to stay with the company too long, so what did it matter if everyone else was being paid 100% fairly?

All the same, though, I told Kyle and Stu what I’d figured out and warned them not to work any overtime hours after the holiday season ended, since all signs suggested that they weren’t going to be paid for them.

 

The Second Overtime Mistake

The week after the boss’s meeting was definitely busier, but not crazy busy.  I decided to try another experiment and stayed an extra hour that Friday night…which didn’t appear on my next paycheck.

I was worried about the boss’s “finishing your work is your responsibility” comment and decided to clear up the missing time by messaging the boss’s wife, who responded with skepticism but agreed to check the records.  She messaged me back saying that though I’d worked an hour late by staying until 7:00pm on Friday, November 10th, I’d also come in an hour late on Monday, November 6th, at 10:00am instead of 9:00am.  She then closed the matter with a curt “Thank you.”

Now, I definitely, DEFINITELY didn’t remember coming in an hour late that Monday November 6th, so I flipped back to my trusty schedule book to see what I’d had going on that week.  That’s when I found this:

 

 

That’s right—the Sunday before had been Daylight Savings Time, and I recalled that the company timeclock hadn’t been turned back an hour until later that Monday, meaning that it had read 10:00 instead of 9:00 when everyone punched in.  When I pointed this out to the boss’s wife, only then did she realize her mistake, saying that she’d go back and update everyone else’s pay too.  To sign off, she said, “Everyone is lucky you noticed that!”

I felt better about getting the missing hour, but now some bigger questions were nagging at me: What kind of payroll person forgets about Daylight Savings Time and doesn’t see that everyone’s clocked in an hour late?  And if I hadn’t noticed the problem, would anyone else have spoken up?

 

“We’re Really Glad You’re Here!”

Meanwhile, I’d started getting to know my coworkers a bit better.  One of our conversations involved how things had changed since I, the company’s first white American, had started working there.

One coworker told me that during the regular season the rest of the marketing team stayed late an hour or more every night because that was when the boss—a night owl who came in anywhere between 10am and noon and often sent group chat messages after midnight—went home.  Sometimes the boss pulled them aside around 5:45 for spontaneous meetings that lasted an hour or longer because he wanted to go over some pressing issue, and my coworkers felt they had no choice but to stay.  Outside of the holiday season, these meetings were never paid.

I, in my own office far away from everyone else, had been oblivious to all this.   I told my coworkers that the boss not paying them overtime was against the law—at least, I was pretty sure it was against the law, since at that point I only vaguely knew the difference between overtime-exempt and non-exempt employees.  I wavered in a sea of doubt, then told them I’d do some research about the laws…which I only sat down and did weeks later when things got REALLY bad.

Still, one coworker told me explicitly, “We’re really glad you’re here,” because my unabashedly leaving at 6:00 had given them the courage to sneak away too, especially when the boss wasn’t looking.

 

Vacation Time Instead of Overtime

Another thing about the overtime rules didn’t seem quite right—and that was something the boss had said during a Marketing meeting he’d held near the end of the summer.

The boss had a new plan to monitor the company inventory on weekends: normally on the weekends the boss checked the inventory quantities himself, but he now wanted us to take a bigger role.  The new task would take between one and two hours a day on Saturday and Sunday, with the three of us trading off different weekends.  Now the boss wanted to know, did we want to be paid overtime for this extra weekend work, or did we want to get it as vacation time to use later?

Something about this deal felt fishy—I’d never worked a job where I was given vacation time in exchange for working overtime.  Besides, if overtime was paid at a time-and-a-half rate (or a doubletime rate for weekends, as the boss had agreed), 1 overtime hour is worth 1.5 hours (or 2 hours) of regular pay, whereas 1 hour of vacation time was equal to only 1 hour of regular pay.  This meant that anyone who took the vacation time deal was giving up some extra money.

I didn’t know the rules for sure, so I played it safe and took the overtime deal.  My coworkers, though, both wanted the banked vacation time—they later told me that the boss had been incredibly strict with letting them take time off, and they hoped the extra vacation time would give them more leverage to take long weekends or leave work for doctor’s appointments.  In one case, the boss had even refused an employee’s request for a half day off to attend his son’s kindergarten graduation.  When I asked if the other employees had set vacation days in their contracts like I did, they laughed at me.  One of my coworkers had even worked two and a half years without taking a day off.

When it came my turn for the weekend shift, I checked in with the boss about the schedule only to have him not reply.  Later he came to meet with me, suddenly announcing that because I was still new and not 100% comfortable with the inventory system, he wasn’t expecting me to work weekends until I’d had more training—a change from his earlier position.  For the time being, my other coworkers would handle weekends, and I was off the hook.

Again, though, I found myself wondering: Did the boss really think I wasn’t skilled enough, or did he just not want to pay me for weekend overtime when he could have my coworkers work for vacation time instead?

To clarify: offering employees time off instead of overtime pay is 100% in violation of the Fair Labor Standards Act (FLSA), as this article makes clear.  The one exception is if employees use their time off during the same workweek, thus cutting them down to 40 hours or less.  Apparently, other companies have tried this trick before to the point where other labor articles mention it specifically, and once again I really wish I’d thought to check this out at the time.

 

Christmas Cranks It Up to 11

It turned out I didn’t have much time to worry about overtime laws because the holidays had us SWAMPED.

Things at work went from easy to batshit crazy in barely a week—people from the office were working in the warehouse, boxes were being stored in hallways until we had space to sort them, and the rush of orders never, ever seemed to slow down.  On the first really busy day I stayed until 10pm while most everyone else stayed until midnight—then, the next day, they did it again.  Everyone was so caught up in the rush that no one had time to think, pause, or take a breath.  At the end of every night my eyes stung from staring at the computer screen and my head grew dizzy from tracking inventory numbers.

My coworkers were constantly tired, exhausted, and cranky, and at least one of them got sick with a high fever that he carried into work with him.  When the boss saw him sleeping in the break room during lunch, instead of suggesting he go home he laughed and left him alone.  That first employee got another employee sick too—and when that employee stayed home to rest, the boss’s wife deducted the time from his pay.

Meanwhile, a slew of temporary holiday help had been brought on, and most of them were also hired using 1099s instead of W-2s just like Kyle and the guy who’d left.  All of us were told explicitly that we could take a break to eat dinner (which, incredibly, the company would pay for!) with the stipulation that the warehouse workers take theirs after the day’s final pickup, which often didn’t happen until after 8:00 or 8:30.  This meant that the warehouse staff worked from 1:30pm until 8:30pm with no break in violation of New Hampshire labor laws, which specify that employees have to get a meal break every five hours.  I vaguely remembered this from my time working at a Market Basket grocery store in high school, but again, I didn’t feel sure enough to come forward.

Some of the boss’s friends had also come to work with us during the busy season, and they didn’t like this arrangement of break times either.  One night they had a huge argument with the boss in the break room and never showed up again, leaving us short-staffed and in even worse shape than before.

Most weeks I racked up around 60 hours, and I was one of the ones who worked the least.  While I swore never to work on Sundays, most of my coworkers worked seven days a week, another violation of New Hampshire labor law, which requires companies to give their employees at least one rest day per week unless the company’s received special permission to do so.  Naturally, I had no reason to believe the company had gotten this permission.

While one of the warehouse workers came in twenty-eight straight days with no day off because he wanted the money, I got the impression that most of my coworkers were there begrudgingly, buried under an onslaught of work and afraid to take a day off or even go home at a reasonable hour to sleep.  There was no specific requirement that they work as much as they did; instead, they seemed beholden to the boss’s vague requirement that the work must get done, even when this proved ridiculously excessive and we were short on help.

I too struggled with getting all of my work done, along with a sense of guilt at watching my coworkers—including Stu and Kyle—stay later and later while I tried to leave by 7:00 or 8:00 so I could squeeze in an hour of creative work and go to sleep at a reasonable time.  Because my inventory and product-listing job was vaguer and less deadline-driven than everyone else’s, it was exponentially easier for me to leave, though I felt deep, twanging pangs of guilt every time I walked through the warehouse and out the front door.

What were my coworkers thinking of me for leaving while they all stayed?


 

*Cue dramatic music* Will Ian and his friends survive the work onslaught and win back their independence?  Find out in Part III, and don’t forget to Like this page to stay in the loop!

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