Minimum Wage and Overtime law is generally derived from state and a federal laws contained in The Fair Labor Standards Act (FLSA), which establishes minimum wage, overtime pay, recordkeeping, and youth employment standards affecting employees in the private sector and in Federal, State, and local governments.
Generally, nonexempt workers are entitled to a minimum wage of not less than $7.25 per hour as of 2020 (state and federal minimum wages can vary). Overtime pay should be at a rate of no less than one and one-half times (1.5 times) the regular rate of pay after 40 hours of work in a workweek.
FLSA Overtime: Covered nonexempt employees must receive overtime pay for hours worked over 40 per workweek (any fixed and regularly recurring period of 168 hours – seven consecutive 24-hour periods) at a rate not less than one and one-half times (1.5 times) the regular rate of pay. There is no limit on the number of hours employees 16 years or older may work in any workweek. The FLSA does not require overtime pay for work on weekends, holidays, or regular days of rest, unless overtime is worked on such days for a given workweek.
Hours Worked: Hours worked ordinarily include all the time during which a covered employee is required to be on the employer’s premises, on duty, or at a prescribed workplace or site.
Recordkeeping: Employers must display an official poster outlining the requirements of the FLSA. Employers must also keep employee time and pay records.
- Overtime laws may apply whether you are paid a salary, hourly, or by the piece.
- Overtime laws may apply, in certain cases, when you are paid by commissions or tips.
- You may be entitled to overtime pay even if you are paid in cash.
- You may be entitled to overtime even when your time records or paystubs do not correctly reflect the hours you actually worked.
Most Common FLSA violations
- Straight time: Paying “straight time” or regular hourly wages for overtime hours – being paid at the same the rate of pay for all your hours worked without paying overtime (one-and-a-half times or 1.5 times the regular hourly rate for all time worked over forty hours per week).
- Meal/Break times: Deducting time for meal or rest breaks and being required to work during these times. If your meal or break time is subject to any interruption, you may be entitled to compensation or overtime pay.
- Management positions: Misclassification of employees occurs when an employee is not paid overtime because of a position or tittle of “manager,” “supervisor,” or “foreman,” while the employee performs the same or similar job functions as his/her co-workers. The title of a covered employee is not definitive on whether you should be paid overtime or not. Instead, your job functions and ability to manage hire and fire are more determinative of whether you are entitled to overtime or not.
- Independent Contractor: Employers frequently misclassify employees as “independent contractors,” make them sign contractor agreements, or pay employees through a corporation they opened, as an attempt to evade the requirements of paying overtime. The title of “independent contractor” or the execution of any agreement are generally not definitive on whether or not a covered employee should be paid overtime or not. Instead, job functions, duties and the actual control and relationship of the parties are more determinative to determine whether a covered employee may be an employee or independent contractor who is not entitled to receive one-and-a-half times (1.5 times) the regular rate for all time worked over forty hours per week.
- Tip credits and Tip sharing: Often time employers (particularly in the restaurant industry) make the choice to pay their employees much less than minimum wages ($3.02 per hour) and/or little, no overtime, or overtime pay at a much lower rate because they believe that the employee either earns or has the potential to actually earn tips to cover the difference. Often times these employers do not accurately document the tips earned or the employer may or may not have a mandatory service charge or if employees are forced to share their tips with non-covered employees (like managers and owners) the entire tip credit scheme can be retroactively invalidated, entitling all covered employees to recover the difference between the reduced hourly rate of pay ($3.02) and the applicable minimum wages inclusive of overtime pay at the rate of minimum wage. This is the case even when a covered employee has agreed to be compensated for the time at that rate or has signed an agreement settling these claims.
- Working off-the-clock: Often times employer require a covered employees to perform tasks before clocking- in, or remain working after clocking-out. Covered employees are entitled to be compensated for all the time they actually worked. This is the case even when a covered employee has agreed to not be compensated for the time or has signed an agreement settling these claims.
- On Call Time: Working from home during and after-hours, including bringing work home, being on call, answering work-related phone calls or answering emails may be compensable. You may be entitled to recover for the time spent working after-hours. This is the case even when a covered employee has agreed to not be compensated for the time or has signed an agreement settling these claims.
- Travel time: Not being paid for the time spent traveling between job sites during the course of a workday.
- Averaging two weeks: Overtime is measured on a weekly basis, regardless on the length of the pay periods. You are entitled to overtime wages when you have worked over 40 hours in the first week, and under 40 hours in the second week, even though your total hours for the two weeks are 80 hours or less. For example, if you worked 50 hours in the first week and 30 hours in the second week. You would be entitled to overtime in the first week, even though the total hours are less than 80 hours. Certain health care related establishments who care for the sick, aged or mentally ill may elect to be pay overtime after 80 hours in two weeks.
- Meeting or Training: Not being paid for time spent by a covered employee attending meetings or training session.
- Child Labor: Are designed to protect the educational opportunities of minors and prohibit their employment in jobs and under conditions detrimental to their health or well-being. Title 11 of the United States Code. However, The Fair Labor Standards Act or the FLSA) require covered employees to be paid one-and-a-half times (1.5 times) the regular rate for all time worked over forty hours per week.