Overtime work in the USA: when the employer is obliged to pay it, and when it may not

Federal and state laws require most employers to pay overtime. The overtime premium is 50% of the employee's regular hourly wage. This means that an employee who works overtime must be paid "time and a half"—the employee's regular hourly pay plus 50% of the overtime premium—for each overtime hour worked. In what cases should employers pay overtime and what you need to know, the publication said Nolo.

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The laws contain many exceptions, so not all employees are eligible for overtime pay.

What is considered overtime work: weekly or day work

Federal and most state laws set a weekly overtime standard, meaning that workers are entitled to pay for every hour over 40 they work in a workweek, regardless of how many hours they work in a day. For example, Alex is a full-time employee who works 12 hours on Monday and 6 on Tuesday, and does not work any additional hours per week. Since his total hours per week do not exceed 40, he is not entitled to overtime pay at the weekly rate.

California and some other states have standard overtime work, among others. This means that employees are entitled to pay for every hour in excess of the eight they work per day. Take Alex from the example above. If so, he would be entitled to overtime pay for the extra four hours he worked on Monday, even if he did not come close to working more than 40 hours a week.

Employers who must pay overtime

While the vast majority of employers are required to pay overtime, not all are required. To find out if your company must pay overtime, first determine if it is subject to the Federal Fair Labor Standards Act (FLSA), the federal Wages and Hours Act, which sets the rules for overtime work.

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Typically, a company is covered by FLSA if its annual sales are $ 500 or more. However, even if the business is smaller, employers must pay overtime if employees work in what Congress calls "interstate commerce," which means they do business between states. This includes more than you might think, including making phone calls to or from another state, sending out-of-state mail, or handling items that come from or will be sent to or from another state.

Even if a company is so small or local that it is not covered by the FLSA (which is quite rare), it may still be subject to state overtime law. Contact your local Labor Department for details.

Which employees are eligible for overtime pay

If the company is subject to the FLSA or the state overtime law, then all employees are entitled to overtime pay unless they qualify. The following workers are “exempt” from the federal overtime law (meaning they are eligible for the exception and therefore are not eligible for overtime pay):

• executive and administrative staff receiving salaries;
• independent contractors;
• volunteers (this exception rarely applies to commercial companies);
• remote salespeople (that is, employees who usually and regularly work away from the company, selling or accepting orders for the sale of goods and services);
• certain computer professionals (for example, systems analysts, programmers, and software engineers) who earn at least $ 27,63 an hour;
• employees of seasonal entertainment businesses such as ski resorts or fairs;
• employees of organized camps, religious or non-profit educational convention centers that operate less than seven months a year;
• employees of some small newspapers;
• distributors of newspapers;
• fishing workers;
• sailors;
• employees who work on small farms;
• some switchboard operators;
• criminal investigators;
• nannies and people who accompany those who are unable to take care of themselves (this exception does not apply to caregivers or personal and home care assistants who perform various home services).

Administrative, executive and professional staff

Perhaps the most common, and confusing, exceptions to overtime laws are reserved for so-called white collar workers. Employees defined by law as “administrative, executive and professional” do not need to be paid overtime.

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To be considered exempt under the FLSA, administrative, executive, or professional employees must be paid and spend most of their time performing duties that require discretion and independent judgment. Some states have introduced additional requirements that make it difficult to qualify for these exceptions, so you should check with state law before classifying an employee as exempt.

Wage basis

An employee receiving a salary must earn at least $ 684 per week. He is obliged to receive the same salary every week, no matter how many hours he works, or the quantity or quality of the work he does.

However, there are several circumstances in which an employer can pay an exempt worker less than his or her full wage per week without prejudice to the exempt worker's status. This includes securing an employee's pay for full-time absences from work in accordance with the employer's paid sick leave policy or during the employee's first or last week of employment.

Official duties

In addition to the above salary requirements, the employee must also perform certain types of work—typically work that is directly related to the company's business operations, requires an advanced degree, or is of a managerial or supervisory nature. In all cases, the employee must be empowered to make business decisions at a relatively high level. Here are the basic requirements for administrative, executive and professional exemptions:

• Administrative staff. They must perform office or other non-physical work that is directly related to the management or business operations of the employer or his clients, and must exercise discretion and independent judgment on important matters.
• Executive staff. Their the primary responsibility should be to manage the employer's business or a recognized unit or department of that business; they are required to regularly supervise at least two full-time employees (or the equivalent of part-time employees); these workers should have the right to hire and fire or contribute significantly to hiring and firing decisions.
• Professional staff. Their main responsibility should be to perform work requiring advanced knowledge in science or learning, which is usually achieved through an advanced course of study; or performing work requiring invention, imagination, originality or talent in a recognized creative or artistic field.

When to contact a lawyer

If you are not getting any overtime pay that you are legally entitled to, please report it to your manager or HR. If that doesn't work, you can contact a lawyer to investigate your legal options.

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