Overtime Pay Requirements


The Federal Fair Labor Standards Act ("FLSA"), 29 USC §§201-219, which has been in effect since 1938, protects employees against working long hours without getting paid properly (i.e., overtime pay). The Wage and Hour Division of the U.S. Department of Labor is generally responsible for enforcement of the FLSA.

While certain classes of employees (e.g., salaried employees) are exempt from overtime pay, it is important to define the employee's primary duties. As an example, if an office clerk is given the title as "office manager" and is then required to work 55 hours a week without being paid overtime, this could be problematic if the majority of time spent by the "office manager" is on clerical duties and not in managing the office. That is just an example of course, but if an employee is misclassified and later files a complaint with the Department of Labor, or otherwise brings a lawsuit against the employer for non payment of overtime, the employer could be liable for fines from the Department of labor of $1,000 per violation (up to $10,000), or if a suit is filed, for damages, court costs, interest, and attorney's fees.

Generally, the Fair Labor Standards Act applies to those employers engaged in the production of goods for commerce with annual gross sales or business volume of $500,000 or greater. For those employers with less than $500,000 in gross sales, it still applies if the employer is involved in interstate commerce, including making phone calls to another state, handling merchandise that came from or is being shipped to another state, and sending mail out of state.

It is therefore recommended that employers review management job descriptions to make sure THAT they comply with federal requirements. If an employer is paying management salaries for supervisory work, the employer is likely in the clear. However, if not, the employer should consider reclassifying and paying overtime.

Even when the FLSA does apply, certain types of employees are nonetheless exempt from overtime because they are executives, administrators, professionals, outside salespersons, or they may perform some other kind of exempt work. Here is a brief rundown of the basic legal tests to determine exceptions to the overtime rule:
A. Professional employees earn a minimum of $455 per week on a fee or salary basis (or $23,660 annually). These people are highly trained, usually have advanced degrees, and perform work requiring an advanced body of knowledge that is acquired through specialized instruction. Their work is often defined as "intellectual," consistently requiring exercise of independent judgment. These employees make major decisions with little supervision. The class includes lawyers (but not paralegals), doctors, dentists (but not hygienists), registered nurses (but not practical nurses), accountants, architects, and teachers.

B. Administrative employees also must earn at least $455 per week paid on a salary or fee basis (or $23,660 annually) and, with little supervision, perform duties that include the exercise of independent judgment and discretion in significant matters. The primary duties of an administrative employee must be performing office or non-manual tasks that are directly related to the management or operations of the employer's business. An employee who doesn't do all these things is probably not an administrator under the law.

C. Executive employees must meet all the following requirements: they make at least $455 a week, paid on salary basis (or $23,660 annually), regularly supervise at least two full-time employees, and their main duties must include authority to hire or fire, or have significant input into the decisions to hire or fire other employees.
Just because an employee is paid a salary instead of an hourly rate doesn't make salaried employees exempt from overtime pay. Salaried employees, who earn $455 weekly or more ($23,660 annually), and perform executive, administrative, or professional duties (as defined in the federal rules) are exempt from overtime pay. Salaried office employees who earn less than $455 weekly (or less than $23,660 annually) and those who do not primarily perform executive, administrative or professional duties duties are not exempt from overtime pay.
On May 18, 2016, the Department of Labor released the final updates to the Fair Labor Standards Act’s White Collar Overtime Exemption. Most businesses will be affected by this update. Here are the key points that every organization needs to know about the rule:
  • The new salary threshold will be $47,476. Any exempt employee earning a salary below this number could be affected.
  • Salaried employees making below the $47,476 threshold will be owed overtime pay for any overtime hours worked.
  • Organizations must have complied with the new rule by December 1, 2016.
  • The duties test will remain unchanged.

D. Outside salespersons who qualify as exempt must have primary responsibilities which include making sales and securing contracts for their employers. The majority of their work must be performed away from the employer's place of business. There is no salary requirement.

E. Other exempt employees include, among other jobs, most truck drivers, most live-in domestic employees, and some agricultural employees, as well as independent contractors, and some computer specialists.

Question: If the employee is not exempt, is the employer permitted to rearrange the employee's time so that the total time worked for the week is less than forty hours?

In Florida, so long as an employee works no more than forty hours in a week, there is no overtime. However, Florida defines the daily threshold for overtime at 10 hours worked, but limits that rule to "manual laborers," unless a written employment contract requires otherwise.

Now we get to the part about overtime. The Florida law continues that unless a contract has been agreed to by the employer and the employee, then overtime pay is due for all work over 10 hours a day. That means that if you were a laborer in Florida, and your employer required that you work 11 hours a day, in that case you would be entitled to extra pay.

The Florida overtime law really is made up of one law, statute 448.01. In basic terms, this Florida overtime law sets 10 hours as the length of a legal workday for manual laborers. If we look at the law a little further, it goes on to explain, though, that 10 hours makes a legal workday unless the employee and the employer have signed a contract that requires more or less hours to be carried out in the day.

448.01 Legal day's work; extra pay. --

(1) Ten hours of labor shall be a legal day's work, and when any person employed to perform manual labor of any kind by the day, week, month or year renders 10 hours of labor, he or she shall be considered to have performed a legal day's work, unless a written contract has been signed by the person so employed and the employer, requiring a less or greater number of hours of labor to be performed daily.

(2) Unless such written contract has been made, the person employed shall be entitled to extra pay for all work performed by the requirement of his or her employer in excess of 10 hours labor daily.

Otherwise, if you weren’t a laborer working by the day, week, month, or year, as stipulated in the Florida regulation, then you would have to follow the rules of the federal Wage and Hour Law.

Overtime Snapshot

The Fair Labor Standards Act generally requires covered employers to pay nonexempt employees not less than one and one-half times their regular hourly pay for every hour beyond 40 in one workweek. The law defines a workweek as a regularly recurring period of 168 hours during seven consecutive 24-hour periods.

The workweek for temporary employees begins at 12:01 a.m. Monday and ends at midnight the following Sunday. The only temporary employees ineligible for overtime are licensed attorneys who are actually doing attorney level work.

An employer is not required to include paid time off (for example, sick days, vacation or paid holidays) in hours worked for purposes of computing overtime. Thus, if holiday pay, sick pay, or any other type of pay for hours not actually worked is included in the weekly pay, the overtime rate does not have to be paid until the hours actually worked exceed 40 hours.

If an employee does not have specific permission to work overtime, extra hours will still count toward the total hours worked and thus be included in the overtime so long as the employer knew or should have known that the employee was working the extra hours and permitted the employee to do so.

Companies can be charged with willful or repeated violations of overtime or minimum wage rules and receive fines per employee.

The information provided above is intended to give you a basic understanding of Overtime Pay rules and requirements, but this does not constitute legal advice and it cannot substitute for a thorough review and determination of individual employment issues, situations and requirements with your attorney.

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