Wage & Overtime Claims
The Fair Labor Standards Act (FLSA) sets forth several provisions related to federal minimum wage and overtime laws. Among other things, the FLSA outlines standards for overtime pay and minimum wages for both full-time and part-time employees. Not all employees are covered by the FLSA, however. Under both minimum wage and overtime rules, an employee must be considered nonexempt to garner FLSA coverage. An employee’s eligibility is ultimately based on his or her salary and job duties.
The federal minimum wage is $7.25 per hour for covered, nonexempt employees. In some cases, an employee may be subject to both federal and state minimum wage laws. Because state minimum wage laws may set a higher amount, the employee is entitled to the higher of the two amounts.
While most jobs are governed by the FLSA, some may still be considered exempt from overtime standards. Employees holding jobs governed by the FLSA are divided into two categories: exempt and nonexempt. Any employee within the nonexempt category is entitled to overtime pay. On the other hand, exempt employees are not eligible for this coverage.
An employee’s eligibility for overtime pay under the FLSA is based on his or her salary. As of December 1, 2016, the standard salary level for a nonexempt employee was increased from $455 per week to $913 per week. Therefore, employees who receive more than $913 per week are not covered by the FLSA overtime rules. The inquiry does not end with the salary level test. An employee may still be exempt from overtime pay if he or she performs specific, exempt job duties. Exempt duties generally refer to high-level work, and usually mean executive, professional or administrative functions. Strictly speaking, under the FLSA, an exempt employee does not have a right to overtime pay.
Under the FLSA, overtime is defined as “time actually worked beyond a prescribed threshold.” For purposes of this definition, the threshold is more than 40 hours in one workweek. Therefore, overtime requirements within the FLSA are not triggered until work has exceeded 40 hours in a single week. Further, an employer cannot deny overtime pay in one week in exchange for time off in another week. This also means an employer cannot average hours worked to avoid paying overtime, in the event an employee works more than 40 hours one week, but less than 40 hours in another week. The FLSA also requires employers to pay employees working overtime in cash. An employer may set up any kind of payment method for employees working no more than 40 hours in one week. Once an employee exceeds 40 hours, though, he or she must be compensated in cash.
An employee working overtime is entitled to time and one-half of their regular hourly rate for all overtime hours worked. The courts have expanded upon which activities generally constitute “work” in this context. Any job-related activity that genuinely benefits the employer, that the employer knows the employee is performing, is considered overtime work. Overtime rates vary among employees because such rates are based on the individual employee’s salary, or regular hourly rate. If an employee’s pay rate is not an hourly rate, an employer will convert that rate to its hourly equivalent to calculate overtime.
The FLSA does not require an employer to pay overtime for work on weekends or holidays. While the FLSA does not require additional pay on such occasion, an employment agreement will likely stipulate a payment plan for weekend or holiday work. The FLSA does not impose any limitation on the number of hours per day, or per week, that adult employees may be obliged to work. At the start of an employment agreement, an employer will typically outline the requisite hours necessary to be considered a full-time employee, rather than a part-time employee.
How to Pursue Compensation
An employee may file a complaint with the U.S. Department of Labor or bring a private lawsuit against an employer for failure to pay overtime, or for miscalculating overtime pay. If the FLSA suit is successful, the employee is entitled to back pay for any unpaid overtime. It is also common for successful employees to receive double the amount of back pay. Under the FLSA, employers are also required to reimburse a successful plaintiff for litigation expenses.