Working Overtime: Overtime Pay You Thought You Never Deserved

Posted by Sessions & Kimball |

Employee Rights Attorney

Orange County, California

I’ve heard it many times before: “You’re salaried”; “you supervise others”; “you’ve been working overtime for too long”; or scores of other reasons-so you don’t qualify for overtime pay.

Wrong!…Maybe. You might be sitting on a goldmine, but will need to know how to find it.

Good Reasons for Overtime Pay

Overtime pay is not simply an unjustified gift. There are good reasons for it:

  • It penalizes employers for abusing workers with long hours, as was so prevalent in the 1800s.
  • It discourages employers from using fewer employees working longer hours to avoid the costly fringe benefits of a larger staff.
  • Employment is spread among a greater number of workers. In fact, this was the main purpose of the federal Fair Labor Standards Act (FLSA) of 1938 which governs overtime compensation.
  • Employees receive fair pay for the inconvenience of long hours to themselves and their families.
  • Studies show productivity is much higher with consistent reasonable work hours. Both employer and employee gain from a reasonable work schedule and premium pay for any exceptions.

Despite these disincentives, overtime is at an all‑time high.

The Fair Labor Standards Act

The federal rule states that you will be paid “time and a half” for any hours worked over 40 per week. If you’re not paid overtime, you can get double damages, interest and attorney’s fees. Willful violations may subject your supervisor and the company to a $10,000 fine and even criminal liability. Retaliation against whistleblowers is strictly prohibited.

The FLSA does not limit hours of work, give extra pay for weekend or holiday work, provide for severance pay, or require discharge notice. It does govern the minimum wage and some other working conditions.

State Laws Expand the Protection

Most states have laws expanding the coverage of the FLSA. Courts look at the state standard if it’s most favorable to the employee. Exceptions to the basic FLSA rule are also narrower under state laws.

For example, in California, time and a half are paid not only for hours over 40 in a week but eight in a day or from hours one through eight on a seventh consecutive day of work. Double time is paid after 12 hours in a day or eight hours on a seventh consecutive day of work. In any event, working more than 72 hours a week is prohibited. Unless overtime pay is paid on termination, daily compensation continues up to 30 days. Other states also give protections beyond FLSA, though not to the same extent as California.

These variations create a challenge for a national corporation to understand and comply with all applicable overtime laws.

The Problem of Who’s Exempt

Not paying overtime is the most common employer violation of the FLSA because of the complexities of determining who is exempt. The major FLSA exemptions concern executive, administrative and professional employees. Generalizations of exempt status are difficult because the focus is on actual job duties, not the job title of the employee. Such “exempt” duties must exceed 50 percent and sometimes 80 percent of work time. For example, a “working manager” who manages part of the time but does the same duties as subordinate employees most of the time is not exempt.

As a general rule, to be exempt, an employee must be paid on a salary basis. This does not mean that just because you are salaried, you are exempt. Outside salespersons, lawyers and doctors do not have to be salaried to be exempt. One must receive a predetermined amount each pay period without reduction for variations in the quality or quantity of the work performed. Thus, your pay should not be “docked” for jury duty, for absences for part of any day, or as a disciplinary action.

An exempt employee must receive a minimum of $155 per week ($8,060 per year). Requirements for exempt status are easier to meet if the salary is over $250 per week ($13,000 per year).

An exempt executive employee must direct two or more employees. An exempt administrative employee must perform work directly related to management policies or general business operations. An exempt professional employee must perform work requiring advanced learning or which is original and creative in a recognized artistic field. All three usually need to exercise discretion and independent judgment in matters of substantial importance and have freedom from immediate direction or supervision. Using “pigeonhole” skills by applying prescribed standards or background knowledge is not sufficient.

There are many variations on these rules that cause much confusion for employers and employees alike.

If there is any doubt at all of your exempt status, have it closely evaluated by someone who knows the rules.

What You Can Do

As you work, document your daily hours in writing. Retain any records of your duties.

Evaluate whether you are really exempt under federal or state law. Call the Department of Labor or its local state agency counterpart for its free help. See an attorney.

Submit your request in writing. Don’t delay; the deadline to take legal action is two years, or three years if the violation was intentional. Document any retaliation against you because of your complaint.

Realize that every claim is not perfect, and even a questionable one has value. It might help you settle other disputes over discrimination or wrongful termination.

Consider overtime pay you thought you never deserved as a potential gold mine-then stake your claim!