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Why Defense Contractors Frequently Violate Federal Overtime Law

This is Part 2 of our three part series regarding overtime violations among Department of Defense contractors.  If you have not already, check out Part 1 (Common Violations in the Industry).

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We frequently see and hear about Department of Defense contractors violating federal wage law (the Fair Labor Standards Act or FLSA) by failing to pay their employees overtime.

In the last few years alone, there have been lawsuits against General Dynamics, Fluor, Acclaim Technical Services, and many others.

Here are five reasons why the industry commonly violates the law:

1. Prior Military Service.

Many managers, supervisors, and employees of defense contractors are former active duty military where they were exempt from federal overtime laws.

When they depart for the private sector, they often assume that because they are still working with the military, the federal overtime laws still do not apply to them.

That is wrong-federal overtime laws apply to civilian military contractors.

2. Overseas Positions.

Employees of defense contractors have often spent time overseas working for private companies that provide services for the U.S. Military.

In those overseas positions, U.S. overtime laws typically do not apply.

But when those same employees return to the U.S., the overtime laws do apply.

For example, defense contractors could pay straight time for all hours worked in Iraq but may have to pay overtime for the same work if it were performed in the U.S.

It is a small difference that could result in a large pay disparity.

3. The Contract Itself.

Companies often believe that the contract with the federal government trumps federal wage and hour laws.

This is not true.

Employee protections under those laws cannot be waived.

Therefore, even if the U.S. Department of Defense is paying a straight hourly rate for all hours billed on the contract, the employer must still comply with federal law and pay its non-exempt employees (meaning, those employees who are entitled to overtime) time and a half for all hours worked over forty in a week.

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4. Military Mentality.

Military workers are used to working long and irregular hours, often in uncomfortable locations.

They are also respectful and have an extraordinary work ethic.

So they are not afraid of hard work and when their supervisors ask them to work long hours, they often readily agree.

Nonetheless, non-exempt workers are still entitled to overtime pay for those long hours.

5. Off the Clock Work.

For a variety of reasons, employees of defense contractors often work off the clock for no pay.

Sometimes it is because of an aggressive supervisor trying to achieve a lower labor cost.

Other times, the defense contractor is allotted only a certain number of hours per day or per worker in its contract with the government and does whatever it takes to stay within that allotment.

Regardless, if you are working, federal law requires that you be paid for that time and supervisors and companies violate the law by requesting that you work for free.

(Bonus) Highly Compensated.

Employees of defense contractors can be highly paid depending on their experience, industry, and living arrangements.

But simply being highly paid does not exempt you from federal overtime requirements.

Your method of pay and job responsibilities must meet stringent requirements before you can even begin to be considered "exempt."

Simply put, "highly compensated" is not a magic bullet that deprives workers of overtime entitlement.

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Employees who prevail on their FLSA claims could recover all of their back pay going back up to three years, double back pay, and attorneys' fees.

If you'd like to discuss a pay practice that may violate the FLSA, contact us at (512) 782-0567 for a free consultation. 

Be sure to check out Part 3 of the series - Nationwide Study Reveals Defense Contractors Most Common Overtime Violator Among Federal Contractors.

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