Overtime and Wage & Hour Cases

One of the oldest federal employment laws is the Fair Labor Standards Act (FLSA), the Depression-era law that sets forth certain minimum wage and overtime standards applicable to virtually all U.S. employers. Although the FLSA covers a number of different areas, including child labor laws, there are two key provisions of the FLSA that impact just about every employee who works for a wage in this country: (1) the minimum wage provision (the federal minimum wage is currently $6.55 per hour, although in a few states, unfortunately not Georgia, the minimum wage is higher); and (2) the overtime provision.

Overtime

The overtime law states that all employees who are not exempt from the FLSA must be paid at a rate of one and one half times their regular rate of pay for all hours worked in excess of 40 hours in any workweek. Although this sounds like a simple rule, it’s far from simple. In fact, the overtime laws are incredibly complex, and there are a number of arcane rules and broad exemptions that employers often rely on in an attempt to avoid their obligation to pay overtime. As a result, unpaid overtime is one of the most frequent sources of employee complaints, and overtime class action cases are probably the fastest growing type of employment litigation in our federal court system.

The most important issue in overtime law is whether or not the law applies to the type of work you do—whether or not you are exempt. Exemptions are rules that state that if you make more than a certain amount of money per week, and if you perform a certain type of “white collar” work, then you are exempt from the overtime laws, and your employer need not pay you time and a half no matter how many hours you work in a week. If, however, the exemptions do not apply to you, then you are considered non-exempt, and your employer must pay you time and a half for every hour you work more than 40 in any workweek.

There are three principal exemptions under the FLSA:

  • Executive
  • Administrative
  • Professional

In order for your employer to establish that your work falls under one of these exemptions, thereby disqualifying you from overtime, your employer must prove that you are paid on a salary basis in an amount not less than $455 per week and that your principal duties are executive, administrative, or professional in nature.

Salary basis test

The salary basis test means that you must be paid a real salary to be exempt—that typically means that you receive a fixed and predetermined sum of money each pay period that does not vary with the amount of hours you work, or the quality of your work. If your compensation varies with the amount of hours you work (in other words, you punch a time card or fill in time sheets), then you are a non-exempt hourly employee and entitled to overtime. Even if you are paid on what appears to be a salary basis, but your employer docks your pay for short term absences or problems with your work, then you are not paid on a salary basis and you are probably non-exempt and eligible for overtime.

It’s critical to remember in these cases is that the title or label of your job does not matter; it is the nature of your work that determines whether or not you are exempt. Don’t be fooled by some companies’ practice of giving hourly employees titles that sound like they are exempt, such as assistant manager. If you don’t perform true managerial functions, then no matter what your job title says, you will still be entitled to overtime.

Duties test

As mentioned above, if you perform typical white-collar duties, then you may be an exempt employee. There are three principle white-collar exemptions: (1) executive; (2) administrative; and (3) professional. There are also a number of miscellaneous exemptions.

Executive Exemption

In order for your employer to prove that your duties are primarily executive in nature, your employer must demonstrate three separate facts:  (1) that your primary duty consists of either managing your employer's business, or a specific department of the business; (2) that you customarily and regularly direct the work of at least two full-time employees: and (3) you must have the authority to hire or fire other employees, or have significant input into hiring, firing, and other important employment decisions.  Typically, the jobs that that qualify for this exemption are executive level positions, high-level managers, and other individuals who manage and control some important aspect of the company’s business.

Administrative Exemption

In order for your employer to prove that your duties are primarily administrative in nature, your employer must demonstrate two separate facts:  (1) your primary duty must be the performance of office or non-manual work directly related to the management or general business operations of your company; and (2) your primary duty involves the exercise of discretion and independent judgment with respect to important company business.

Professional Exemption

In order for your employer to prove that your duties are primarily professional in nature, your employer must demonstrate all of the following: (1) your primary duty must involve work that requires advanced knowledge, such as work which is predominantly intellectual in character and which includes work requiring the consistent exercise of discretion and judgment; (2) the advanced knowledge must be in a field of science or learning; and  (3) the advanced knowledge must be customarily acquired by a prolonged course of specialized intellectual instruction—in other words an advanced degree.  There is also a related creative professional exemption.  This exemption applies if your primary duty involves artistic or creative work. 

In addition to these three exemptions, the two other common exemptions are for outside salespeople and certain computer employees. 

Computer Employee Exemption

To be subject to the computer employee exemption, you must be paid on salary basis of not less than $455 per week; you must be employed as a computer systems analyst, programmer, software engineer or skilled worker in the computer field; and your primary duties must consist of software, hardware or system consulting, design, development, documentation, analysis, creation, testing or modification or a combination of these skills.

Outside Sales Exemption

To be subject to the outside sales employee exemption, your primary duty must be making sales or obtaining orders or contracts, and you must be customarily and regularly engaged away from your workplace.

Rights and Remedies

The FLSA is one of the most employee-friendly of the federal labor laws, and it sets minimum standards applicable to all covered employees that cannot be reduced or waived.  In other words, if you are non-exempt, then your employer must pay you overtime, and it cannot ask you to take a lesser amount or get you to waive your rights to overtime in any way.  However, state laws and collective bargaining agreements can impose greater duties on employers than the FLSA, and in a few states the minimum wage is higher than the federal minimum.

If you believe that you have been denied overtime or that your employer has committed some other violation of the wage and hour laws, you don’t have to file an EEOC claim as you would in a typical discrimination case.  Instead, you can hire a private attorney and file suit as soon as you discover the violation.  If other people at your company have also been denied overtime, you may be able to file a special type of FLSA class action, known as a collective action, which will help you bring the maximum pressure to bear on your employer to change its ways and to pay you all the compensation you are owed.

Also unlike the discrimination laws, the FLSA has a much longer statute of limitations—you have two years to file suit for most violations and three years if your employer’s violation of the law is willful.  You damages can include all back wages (which includes any unpaid overtime), plus an amount equal to your unpaid back wages, interest, attorneys’ fees, and court costs.

The FLSA is an extremely complex statute; there are hundreds of pages of rules and regulations covering the exemptions and other aspects of the law.  But the attorneys of The Buckley Law Firm have read these hundreds of pages, and we are very experienced in handling wage and hour cases.  We’ve handled both individual overtime cases and huge collective actions, recovering millions of dollars in unpaid overtime for our clients.

If you have any reason to believe that you or anyone else at your company have been denied overtime, call us anytime at our toll free number—1-877-JOB-JUSTICE (1-877-562-5878) or email us.  If you work the hours, you’re entitled to the pay—contact us to get all the pay you deserve.

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