When an employee is required to work more than the regular working hours, the employer may be obligated to pay him/her over and above the usual wage. This is known as overtime pay.
The Fair Labor Standards Act (FLSA) regulations stipulate that when employees work more than 40 hours in a working week, they must receive at least one-and-a-half times the regular rate of pay. The total wage, therefore, translates to a combination of the usual hourly rate plus a 50 percent overtime premium for every extra hour worked.
However, as per the FLSA, overtime need not be paid if employees are working on Saturdays, Sundays, holidays, or other regular days of rest if the required 40-hours-a-week mark hasn’t been exceeded. Further, extra payment for working weekends or evenings/nights needs to be agreed upon by both the employer and the employee.
When calculating overtime, the FLSA also requires bonus payments to be included in an employee’s regular salary. If you are employed in a state that has enacted its overtime laws, then you are subject to both state and federal overtime laws. In such a case, the employee is entitled to receive the overtime amount that makes the higher rate of pay (either federal or state).
Not all employees are eligible for overtime wages, though. The entitlement greatly depends on the laws of your state, your workplace policies, and the total number of hours worked.
Is Your Employer Required to Pay Overtime?
Most employers are required to pay overtime, but a few may not be required to do so. If you are not sure of your overtime entitlement, find out if your employer falls under the Fair Labor Standards Act (FLSA). This federal act covers wage-and-hour laws and outlines overtime rules. Any business with annual sales exceeding $500,000 is usually covered under the FLSA.
Also, certain small businesses fall under the FLSA and are, therefore, required to pay overtime if they are involved in interstate commerce. This refers to business conducted over two states, and not necessarily limited only to financial transactions. It can include phone calls, emails, and movement goods from one state to another.
It is highly unlikely for an employer to not be covered by the FLSA, unless it is a very small or local company. However, it is best to contact the state’s labor department to be sure.
Deciding to Sue
The FLSA states that an employee has two years to file a lawsuit against the employer for claiming unpaid overtime wages in the federal court. The law also stipulates that a plaintiff who hires an unpaid overtime dispute attorney will recover the attorney’s fees in the lawsuit, along with other damages.
According to a new law which took effect from December 1, 2016, if you are earning less than $47,476 per year and are not being paid for working extra hours (more than the usual 40 hours per week), then you can speak with your employer to verify if you are eligible for overtime payment. Depending on the outcome, you can decide whether or not you want to sue your employer.
Government Investigation of Employers
The Wage and Hour Division (WHD) – part of the United States Department of Labor – is responsible for enforcing several federal labor laws, including those related to overtime wages.
The WHD investigates employers to find out whether or not federal laws are being enforced. For example, they can verify whether employees are being paid in accordance with the laws applicable to them. The WHD may conduct investigations without disclosing the reason behind them. If the investigation has been initiated due to a complaint, details of the complaint and the complainant remain confidential.
The WHD especially targets low-wage industries, as they tend to employ more vulnerable workers. An investigation will likely follow these steps:
- Examining records of the company to see which laws are applicable. For example, checking what the employer’s annual dollar volume for business transactions is and authenticating if they are involved in interstate work.
- Examining payroll and time records.
- Interviewing employees to verify payroll and time records as well as checking workers’ duties to see if any exemptions apply. This is also done to verify if minors are legally employed. These interviews are usually conducted on the employer’s premises, but always in private. Sometimes, these interviews can be conducted at the employee’s home or via telephone.
- Once the fact-finding process is completed, the investigator meets with the employer (or an authorized representative) to let them know about the necessary corrective measures (if any violations have taken place). The employer is given complete details of the violations and how to fix them. If the violation refers to non-payment of wages or overtime, the investigator requests the employer to do so.
Recovering Wages
Thanks to the FLSA, the Department of Labor has the authority to recover any wages that are due to workers and assess the civil money penalties that need to be paid to the government. This includes checking for minimum wage, overtime, and other possible violations. If required, the Department of Labor has the right to recommend criminal prosecution or litigation against the employer.
Under federal law, an employer is forbidden from terminating an employee for asserting his or her rights. This law protects employees who approach the Department of Labor with concerns about unpaid overtime wages.
It is imperative that you, as an employee, are aware of your legal rights under federal law. Speak with your employer and clear the confusion regarding hours worked, salary, and overtime. If you are not being paid the overtime wages you’re eligible for, it is highly recommended that you speak with an attorney.