Overtime Pay Complaints

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Who Is Exempt From Overtime?

The Fair Labor Standards Act (FLSA) provides an exemption from overtime pay (and minimum wage) for employees employed as bona fide executive, administrative, professional, outside sales employees. FLSA also exempts certain computer employees. An exempt employee is one who is not entitled to the minimum wage or overtime pay protections of the FLSA. A nonexempt employee is one who is entitled to the minimum wage and/or overtime pay protections of the FLSA.

General Exemption Requirements:

For the FLSA section 13(a)(1) exemptions to apply, an employee generally must be paid on a salary basis of no less than $455 per week and perform certain types of work that:

• is directly related to the management of his or her employer’s business, or
• is directly related to the general business operations of his or her employer or the employer’s clients, or
• requires specialized academic training for entry into a professional field, or
• is in the computer field, or
• is making sales away from his or her employer’s place of business, or
• is in a recognized field of artistic or creative endeavor.

Being paid on a “salary basis” means an employee regularly receives a predetermined amount of compensation each pay period on a weekly, or less frequent, basis. The predetermined amount cannot be reduced because of variations in the quality or quantity of the employee’s work.

Administrative, professional and computer employees may also be paid on a “fee basis” rather than on a salary basis. If the employee is paid an agreed sum for a single job, regardless of the time required for its completion, the employee will be considered to be paid on a “fee basis.” To determine whether the fee payment meets the minimum salary level requirement, the test is to consider the time worked on the job and determine whether the payment is at a rate that would amount to at least $455 per week if the employee worked 40 hours.

Job titles alone do not determine the exempt or non-exempt status of any employee. Each determination is based on the specific job duties performed and compensation received.

Executive Exemption

To qualify for the executive employee exemption:

• The employee must be compensated on a salary basis at a rate not less than $455 per week;
• The employee’s primary duty must be managing the enterprise, or managing a customarily recognized department or subdivision of the enterprise;
• The employee must customarily and regularly direct the work of at least two or more other full-time employees or their equivalent; and
• The employee must have the authority to hire or fire other employees, or the employee’s suggestions and recommendations as to the hiring, firing, advancement, promotion or any other change of status of other employees must be given particular weight.

Administrative Exemption

To qualify for the administrative employee exemption:

• The employee must be compensated on a salary or fee basis at a rate not less than $455 per week;
• The employee’s primary duty (“primary duty” means the principal, main, major or most important duty that the employee performs) must be the performance of office or non-manual work directly related to the management or general business operations of the employer or the employer’s customers (i.e., directly related to assisting with the running or servicing of the business); and
• The employee’s primary duty includes the exercise of discretion and independent judgment with respect to matters of significance (i.e., the comparison and the evaluation of possible courses of conduct and acting or making a decision after the various possibilities have been considered. The term implies that the employee has authority to make an independent choice, free from immediate direction or supervision).

Learned Professional Exemption

To qualify for the learned professional employee exemption:

• The employee must be compensated on a salary or fee basis at a rate not less than $455 per week;
• The employee’s primary duty must be the performance of work requiring advanced knowledge, defined as work which is predominantly intellectual in character and which includes work requiring the consistent exercise of discretion and judgment;
• The advanced knowledge must be in a field of science or learning; and
• The advanced knowledge must be customarily acquired by a prolonged course of specialized intellectual instruction.

Creative Professional Exemption

To qualify for the creative professional employee exemption:

• The employee must be compensated on a salary or fee basis (as defined in the regulations) at a rate not less than $455 per week;
• The employee’s primary duty must be the performance of work requiring invention, imagination, originality or talent in a recognized field of artistic or creative endeavor.

Computer Employee Exemption

To qualify for the computer employee exemption:

• The employee must be compensated either on a salary or fee basis (as defined in the regulations) at a rate not less than $455 per week or, if compensated on an hourly basis, at a rate not less than $27.63 an hour;
• The employee must be employed as a computer systems analyst, computer programmer, software engineer or other similarly skilled worker in the computer field performing the duties described below;
• The employee’s primary duty must consist of:

1) The application of systems analysis techniques and procedures, including consulting with users, to determine hardware, software or system functional specifications;

2) The design, development, documentation, analysis, creation, testing or modification of computer systems or programs, including prototypes, based on and related to user or system design specifications;

3) The design, documentation, testing, creation or modification of computer programs related to machine operating systems; or

4) A combination of the aforementioned duties, the performance of which requires the same level of skills.

Outside Sales Exemption

To qualify for the outside sales employee exemption:

• The employee’s primary duty must be making sales, or obtaining orders or contracts for services or for the use of facilities for which a consideration will be paid by the client or customer; and
• The employee must be customarily and regularly engaged away from the employer’s place or places of business.

An outside sales employee makes sales at the customer’s place of business, or, if selling door-to-door, at the customer’s home. Outside sales does not include sales made by mail, telephone or the Internet unless such contact is used merely as an adjunct to personal calls. Any fixed site, whether home or office, used by a salesperson as a headquarters or for telephonic solicitation of sales is considered one of the employer’s places of business, even though the employer is not in any formal sense the owner or tenant of the property.

Highly Compensated Employees

Highly compensated employees performing office or non-manual work and paid total annual compensation of $100,000 or more (which must include at least $455 per week paid on a salary or fee basis) are exempt from the FLSA if they customarily and regularly perform at least one of the duties of an exempt executive, administrative or professional employee identified in the standard tests for exemption.

Blue Collar Workers

The exemptions above apply only to “white collar” employees who meet the salary and duties tests. The exemptions do not apply to manual laborers or other “blue collar” workers who perform work involving repetitive operations with their hands, physical skill and energy. FLSA-covered, non-management employees in production, maintenance, construction and similar occupations such as carpenters, electricians, mechanics, plumbers, iron workers, craftsmen, operating engineers, longshoremen, construction workers and laborers are entitled to minimum wage and overtime premium pay under the FLSA, and are not exempt no matter how highly paid they might be.

Police, Fire Fighters, Paramedics & Other First Responders

The exemptions also do not apply to police officers, detectives, deputy sheriffs, state troopers, highway patrol officers, investigators, inspectors, correctional officers, parole or probation officers, park rangers, fire fighters, paramedics, emergency medical technicians, ambulance personnel, rescue workers, hazardous materials workers and similar employees, regardless of rank or pay level, who perform work such as preventing, controlling or extinguishing fires of any type; rescuing fire, crime or accident victims; preventing or detecting crimes; conducting investigations or inspections for violations of law; performing surveillance; pursuing, restraining and apprehending suspects; detaining or supervising suspected and convicted criminals, including those on probation or parole; interviewing witnesses; interrogating and fingerprinting suspects; preparing investigative reports; or other similar work.

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How Do Employers Cheat Employees Out Of Earned Overtime Pay?

Employers often try to avoid paying employees overtime pay in the following ways:

-By misclassifying a non exempt employee as an exempt employee (for instance, by miscategorizing workers as executives, administrators, professionals, outside sale persons or independent contractors);

-Requiring employees to work off the clock (for instance, by failing to record time actually worked on the job, failing to compensate for meal periods and rest breaks, failing to pay overtime for travel from shop to work-site and back, not paying overtime for time spent working while traveling, failing to pay overtime for attendance at training, meetings and lectures, failing to compensate for arriving early to perform necessary preparations for work, not paying overtime for time it takes to suit-up or put protective gear on, time waiting to log in, on-call time, or time in security lines, forcing employees to work on the weekends without clocking in, or by telling employees to report fewer hours than actually worked);

-Telling employees that they are not entitled to overtime for various improper reasons (for example, that that they didn’t get permission or approval in advance, that they are paid on a salaried basis, etc.);

-Incorrectly calculating the amount due (by, for instance, carrying over one week’s overtime hours into another week, paying employees their regular rate for overtime work; altering employees’ time sheets, etc.);

-Giving time off in lieu; compensatory time; or comp time to private sector workers (a type of work schedule arrangement that allows workers to take time off instead of, or in addition to, receiving overtime pay.).

For some time now, big companies have been paying out big bucks defending employee overtime lawsuits for failure to pay overtime pay and wages, for example, by misclassifying non-exempt employees as exempt.

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Overtime Pay Requirements of the FLSA 

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What Is Overtime?

Overtime is the amount of time someone works beyond normal working hours. For covered, nonexempt employees, the Fair Labor Standards Act (FLSA) requires overtime pay at a rate of not less than one and one-half times an employee’s regular rate of pay after 40 hours of work in a workweek. The U.S. Department of Labor Employment Standards Administration Overtime Fact Sheet entitled Overtime Pay Requirements of the FLSA states that “An employer who requires or permits an employee to work overtime is generally required to pay the employee premium pay for such overtime work.”

Unless specifically exempted, employees covered by the FLSA 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 FLSA on the number of hours employees age 16 and older may work in any specific workweek.

The FLSAt applies on a workweek basis. An employee’s workweek is a fixed and regularly recurring period of 168 hours — seven consecutive 24-hour periods.  The work week 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, however, 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 cannot be less than the minimum wage. The regular rate includes all remuneration for employment except certain payments excluded by the FLSA 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 under the FLSA 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.  The employee’s regular rate of pay is calculated by dividing the total pay for employment (except for the statutory exclusions set forth above) in any workweek by the total number of hours actually worked by the employee.

Some exceptions to the 40 hours per week standard apply under special circumstances to police officers and firefighters employed by public agencies and to employees of hospitals and nursing homes.

Federal Overtime Labor Law Versus State Overtime Labor Law

Some states also have enacted state-specific overtime laborlaws.  Where an employee is subject to both the state and federal overtime labor laws, the employee is entitled to overtime according to the higher standard (i.e., the standard that will provide the higher rate of pay).

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The Overtime Pay Complaints Blog

Welcome to Overtime Pay Complaints, a weblog brought to you by the attorneys at ClassActionConnect.com. We created this overtime pay blog for employees to voice their concerns, complaints and issues about their employer and/or employment to the public by posting comments describing their experiences with other employees. Topics include issues such as wage and hour disputes and overtime pay and labor law violations.

If you believe you have not received all of the wages or overtime pay that you believe you are owed under federal and/or state labor laws, report your employer to an employment law overtime pay class action attorney.

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Wronged By Your Employer?  Not Paid Overtime, Wages, Salary & Benefits Due?  Want To Fight Back?

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