Overtime Pay Rate Requirements

Practice Areas :: Overtime

Have You Been Denied Overtime Pay?

Some employers have been skirting overtime pay laws, requiring their employees to work long hours, while providing minimal or zero extra pay. Many types of jobs are affected, from bus drivers, parking lot attendants and personal attendants to computer technicians. The list of companies involved in overtime lawsuits includes major US companies such as Wal–Mart, Target, and Starbucks.

With some exceptions, federal law requires employees to receive 150% or 1 1/2 times their pay rate per hour when they work more than 40 hours a week. State laws, including those of California, may have stricter and more specific requirements that benefit workers. When an employee is covered by both federal and state wage laws, the employee is entitled to be paid under the law that provides the most generous benefit.

Misclassifying Employees to Avoid Overtime Payments

Certain types of employees are not eligible for overtime pay, including executives and administrators. In an effect to avoid paying overtime, some companies have misclassified employees, giving them executive and administrative titles when they actually did other jobs.

Under federal law, workers are considered managers or executives if they:

• Are paid on a salaried basis (at least $455 per week)
• Oversee at least two full–time employees
• Have the authority to hire and fire workers
• Have the main duty of managing the business, or managing a customarily recognized department or division of the business

The fast–food restaurant business provides an example of how an employer can unfairly misclassify a worker as a manager. Consider an employee who spends most of the time serving food or working the cash register, and spends only a small portion of the day supervising other employees. Although this employee may have the title of “manager” or “supervisor,” he or she does not really fit into the executive category and should be receiving overtime pay, according to laws enacted in some states. Federal regulations that went into effect in August 2004 may complicate this issue.

Administrators are defined as workers who perform office or non–manual work directly related to management or general business operations. These jobs include tasks such as accounting, human resources, and legal work. To be ineligible for overtime pay, the employee’s primary job must involve exercising “discretion or independent judgment.” As an example of how this test works, a personnel clerk in a human resources office who merely screens applicants is probably not an administrator, and would be eligible for overtime.

Your Overtime Pay Case

We have only presented a brief overview of issues related to overtime. Federal law also provides that certain professionals, outside sales people, and specified computer employees are not eligible for overtime pay. Defining these categories is not a simple process, however. Overtime pay laws are complex. So are the court decisions that interpret them.

Please feel free to contact us for more information. If you feel that you have been unjustly denied overtime pay, we can review your case and advise you of your legal options.

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