In terms of compensation issues, overtime is often the most confusing. While plenty of workers suspect that they are owed overtime pay, it can be difficult to make a determination with complete certainty. And even if someone does determine that he or she should be receiving overtime, he or she may be worried about the potential consequences of taking legal actions to secure what they’re owed. Adding to the confusion is the fact that although a new set of overtime regulations went into effect in August of 2004, most of those regulations have yet to be fully clarified by court decisions.
Since overtime pay is a surprisingly complex issue, the following information is designed to shed some much needed light on this subject. In addition to learning more about overtime pay, having a consultation with an attorney is the best thing to do for anyone who has reason to believe that they’re owed overtime pay.
Understanding overtime pay
While there are laws that limit how many hours a week minors can work, those types of laws don’t exist for adult employees. However, once an eligible worker exceeds 40 hours in a single week, federal law mandates that the excess hours they accumulate in that week need to be paid at a rate of 1.5 times that worker’s standard hourly wage.
In the previous sentence, you may have noticed the presence of the word eligible. The reason that word is so important in the context of overtime pay is although approximately 80 million Americans are covered by the Fair Labor Standards Act, not all 80 million of those people are eligible for overtime.
If a worker believes they are eligible for overtime pay, the first step is to determine if their employer is subject to the laws set forth in the Fair Labor Standards Act (FLSA). Coverage by the FLSA can take the form of enterprise or individual coverage. Enterprise coverage applies to businesses with at least two employees and a minimum of $500,000 in annual revenue. Individual coverage protects any employees engaged in work that involves commerce between states.
In addition to those two forms of coverage, FLSA protection can also apply to domestic service workers like housekeepers and full-time babysitters, as well as workers involved in a range of construction activities.
FLSA coverage does not guarantee overtime eligibility
Another reason that the subject of overtime pay can be such a confusing topic is just because an employer falls under the FLSA blanket, it does not automatically mean their employees are eligible for overtime. Not only are certain types of jobs specifically excluded from FLSA protection, but many salaried employees that perform the duties of an exempt employee can’t qualify for overtime.
3 common myths about overtime pay
In addition to the belief that FLSA coverage automatically creates overtime eligibility, there are several other common myths about overtime pay. They include:
- An employer being able to prevent an employee from claiming overtime in exchange for a raise
- Bonuses automatically excluding employees from overtime pay
- Weekend work being eligible for double time pay
In regards to the first myth, negotiations or announcements saying that overtime will not be permitted are not valid. There is no legal way for the overtime requirement to be waived by an agreement between an employer and employee.
With the second myth, employers cannot evade the law by paying a fixed salary for a regular workweek longer than 40 hours. And for the third myth, there’s no requirement in the FLSA for extra weekend pay. However, if an employee works at least 40 hours during the workweek and then more on the weekend, the additional hours over 40 are eligible for overtime pay of 1.5 times their standard hourly rate.
What should an eligible employee do about overtime pay
The US Department of Labor has a specific division that’s dedicated to enforcing the FLSA. The division, which is known as the Wage-Hour Division (WHD), investigates the claims it receives. If this division investigates a claim and determines that an employee is eligible for overtime payments, it may supervise the payment of owed back-wages.
As with most claims of this nature, there is a limited window in which they can be filed. Overtime claims must be filed to the WHD within two years of when the violation occurred. The only exception is if the claim alleges an employer willfully broke the law. In those situations, the window is extended to three years.
In addition to going through the WHD, employees also have the right to bring forward a private lawsuit. Given the volume of complaints that the WHD receives and has to investigate, many employees have found that the best way to get what they are owed in a timely manner is to go through a private lawsuit.
If you believe you’re owed overtime pay and want to settle this matter as soon as possible, the recommended course of action is to schedule a consultation with an experienced attorney.