Under the federal Fair Labor Standards Act (FLSA), non-exempt employees in all states must be compensated accordingly for any overtime hours they work. Anything over 40 hours within the course of a week qualifies as overtime.

For workers who are paid by the hour, the hourly overtime rate is determined by multiplying their normal hourly wage by 1.5. It is commonly believed that salaried employees can never claim overtime, but this is not always true. Under certain circumstances, salaried employees may be entitled to additional compensation when they work more than 40 hours a week. The hourly overtime rate for a salaried employee is determined as follows. Depending on whether the employee receives a paycheck every week or every other week, the amount of the paycheck is divided by 40 (for a weekly paycheck) or 80 (for a bimonthly paycheck) to arrive at a regular hourly rate. That rate, multiplied by 1.5, equals the proper overtime rate for the salaried employee.

An employee who has worked overtime hours without proper compensation has two years from the date the pay was earned to collect it. This period is extended to three years if the employer was consciously violating the law. Where the employers failure to pay overtime is found to be intentional, the employer may be ordered to pay the employee double the amount of earned overtime pay. This feature of the FLSA, known as liquidated damages, is intended to punish the employer for its conduct.

Key Elements of The FLSA

Not all employers are required to comply with the FLSA. Likewise, not all employees are entitled to the protections of this law. Thus, to determine whether overtime is owed in a particular situation, the primary questions that must be answered are whether the law applies to both the employer and the employee.

The Employer: Covered or Not?

The FLSA applies to all employers whose gross receivables exceed $500,000 per year. This amount refers to the total amount of money coming into the company, rather than the amount the company realized as profits. Thus, the fact that a company may have realized less than $500,000 in profits in a year does not automatically excuse the company from complying with the FLSA. The size of the company in terms of number of employees also makes no difference. So long as the company brought in more than $500,000 in a year, it is covered by the FLSA, and must compensate its employees accordingly when they work overtime.

The Employee: Exempt or Non-exempt?

Only non-exempt employees are entitled to overtime under the FLSA. Exempt employees those who are outside the scope of the law are not required to be paid overtime.

An employee who is paid by the hour, rather than by salary, is automatically non-exempt, and is entitled to overtime pay for working more than 40 hours in a week.

As a general rule, high-paying executive, professional or managerial jobs are exempt from the FLSA. The FLSA also includes a particularized list of jobs that are not covered by the law; these include computer analysts, salespeople and restaurant servers. Furthermore, the FLSA does not apply to independent contractors (self-employed people who perform work for a company on a contract basis).

In addition to the FLSA a federal overtime law that applies in all states some states have their own overtime laws. Illinois is one such state. While this page only discusses the FLSA, any employee who believes that he or she may be owed overtime pay should consult a lawyer who is knowledgeable in both federal and state overtime laws.

The Problem of Employers Who Fail to Comply With The FLSA

Many covered employers regularly fail to pay overtime to employees who have rightfully earned it. There are various ways that this can happen. In some instances, it amounts to an honest mistake by an employer who simply does not have a thorough or proper understanding of the FLSA. In other instances, the employer is acting intentionally in an effort to save itself money.

As one example, employers often do work for the employers benefit while not on the employers premises, such as responding to work-related emails from home or being on call. The employee is working in these situations, and is entitled to be compensated appropriately for it.

Another way problems arise is when employers classify employees as exempt (not entitled to claim overtime pay) when they are actually non-exempt (entitled to claim overtime pay). For instance, an employer might classify as exempt an employee who has the word manager in his title. But application of the managerial exemption discussed above depends on the substance of the job, not its title. Even if you are called a manager, you are only exempt if your job actually involves supervising other workers. Likewise, the fact that your employer refers to you as an independent contractor does not prohibit you from claiming overtime if you meet the definition of an employee.

…additional hours constitute overtime and must be compensated as such…

Earned overtime also commonly goes unpaid for employees who are regularly required to work more than 40 hours a week. In an effort to discourage overtime claims, the employer may place these employees on a salary as opposed to an hourly wage. Alternatively, the employer might convince these employees that, since the extra hours are a condition of the job, the regular hourly rate is adequate compensation. Under the FLSA, that is not accurate. While an employer can require employees to work more than 40 hours a week, the additional hours constitute overtime and must be compensated as such.

Along similar lines, take the example of an employee who regularly works 40 hours a week. Sometimes such an employee takes one eight-hour day off (thus working 32 hours in a given week) and makes up that time the following week (thus working 48 hours the following week). During the two-week period, the employee has therefore worked 80 hours, just as she normally would. However, because she worked more than 40 hours during the second week, the additional eight hours must be compensated at the overtime rate.

An especially egregious situation occurs when employers outwardly retaliate against employees who question the adequacy of their pay for overtime hours. It is illegal for an employer to fire, demote or otherwise retaliate against an employee for pursuing an overtime claim. In fact, the wronged employee in this situation may have a good claim for retaliatory discharge in addition to his overtime claim. Nonetheless, the employers behavior may scare other employees into silence. An employee who knows that he has been inadequately compensated for his work may decide to keep his mouth shut for fear of losing his job altogether.

Putting The FLSA to Work For You

It is not always a simple matter to determine whether your employer is obligated to comply with the FLSA, or whether you are a non-exempt employee entitled to claim overtime pay. Moreover, accurately calculating the amounts to which you may be due requires a thorough understanding of the FLSA. And as noted above, some states (Illinois included) have their own overtime laws, which can sometimes increase the value of an overtime claim. For these reasons, an essential part of a successful overtime claim is to have a knowledgeable lawyer on your side.

Under the FLSA, you have a limited amount of time in which make a claim, so if you think that you have been denied earned overtime pay or been inadequately compensated for overtime hours, dont delay. Call GWC, where our Chicago labor and employment lawyers welcome the opportunity to give you a free consultation and help you pursue any overtime claims you may have.

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