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Overtime Pay

MARY KEATING: The Fair Labor Standards Act governs minimum wage and maximum hours that an employee can be required to work each week at that minimum wage. Assuming that you are not exempt from the Fair Labor Standards Act, you are entitled to make minimum wage and to be paid overtime if you work more than 40 hours in a week.

ROCHELLE EISENBERG: You cannot combine weeks. For instance some employers will say, well you worked 50 hours this week, so I want you to work a few more hours the next week, so I do not have to pay the overtime this week. It does not work like that, you cannot combine workweeks.

MARY KEATING: An hourly employee is someone who is entitled to overtime, if he or she works for more than 40 hours in a week and a salaried employee is often the word given to an exempt employee, but it is not enough for the employer to say you are on salary, you do not get overtime. It is really the law that decides whether you fall into that exemption.

ROCHELLE EISENBERG: If you are a professional employee such as an attorney, a physician, an accountant, you are an exempt employee and not entitled to overtime. If you are a certain type of administrative employee, you are not entitled to overtime, but just because you are called an administrative assistant does not mean you are not entitled to overtime. Your typical administrative assistant is entitled to overtime and then you have your executive employee, the president of the company, that person is not entitled to overtime. The employers are required to keep wage and hour records on employees who are entitled to overtime. Often the employer is not keeping the record, but the employee is. I worked once for an employer, who was not keeping those records and an employee came up to me, she was entitled to literally hundreds of hours of overtime. She had not asked for permission to work it, but she had worked it. The employer must pay her the overtime. Under certain wage and hour loss, the employer may have to pay triple the overtime and if the employee has a lawyer, might have to pay those lawyer fees too. It is very simple to keep wage and hour records. It is surprising how many employers do not.

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Overview of Overtime: The Fair Labor Standards Act

Like many laws, this one is pretty complex. Even the labor lawyers hit the books when confronted with innumerable workplace scenarios. So, if you'll promise to consult with counsel before attempting to decipher the nuances of this Act all by yourself, I'll let you read this general overview of the overtime rules.

Unless specifically exempted, employees covered by the Act must receive overtime pay for hours worked in excess of 40 in a workweek at a rate not less than time and one-half their regular rates of pay. There is no limit in the Act on the number of hours employees aged 16 and older may work in any workweek. The Act does not require overtime pay for work on Saturdays, Sundays, holidays, or regular days of rest.

The Act applies on a workweek basis. An employee's workweek is a fixed and regularly recurring period of 168 hours -- seven consecutive 24-hour periods. It need not coincide with the calendar week, but may begin on any day and at any hour of the day. Different workweeks may be established for different employees or groups of employees. Averaging of hours over two or more weeks is not permitted. Normally, overtime pay earned in a particular workweek must be paid on the regular pay day for the pay period in which the wages were earned.

The regular rate of pay can't be less than the minimum wage. The regular rate includes all remuneration for employment except certain payments excluded by the Act itself. Payments which are not part of the regular rate include pay for expenses incurred on the employer's behalf, premium payments for overtime work or the true premiums paid for work on Saturdays, Sundays, and holidays, discretionary bonuses, gifts and payments in the nature of gifts on special occasions, and payments for occasional periods when no work is performed due to vacation, holidays, or illness.

Earnings may be determined on a piece-rate, salary, commission, or some other basis, but in all such cases the overtime pay due must be computed on the basis of the average hourly rate derived from such earnings. This is calculated by dividing the total pay for employment (except for the statutory exclusions noted above) in any workweek by the total number of hours actually worked.

Where an employee in a single workweek works at two or more different types of work for which different straight-time rates have been established, the regular rate for that week is the weighted average of such rates. That is, the earnings from all such rates are added together and this total is then divided by the total number of hours worked at all jobs. In addition, the FLSA allows, under specified conditions, the computation of overtime pay based on one and one-half times the hourly rate in effect when the overtime work is performed.

Where non-cash payments are made to employees in the form of goods or facilities, the reasonable cost to the employer or fair value of such goods or facilities must be included in the regular rate.

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