What Are The Overtime Laws For Other Job Types?

Employers are free to set pay structures as they see fit, as long as they are still complying with the minimum wage and overtime provisions of the Fair Labor Standards Act and any state labor laws.

1099 Worker / No Payroll Taxes Withheld

Generally, if an employer is not withholding payroll taxes from a worker’s pay, this means the employer has classified the employee as an independent contractor. See the following for a discussion of the factors to be considered when determining if a worker is properly classified as an independent contractor. Overtime Pay Laws for Independent Contractors.

Flag Rate

Under the flat rate and flag rate systems, a customer is charged a certain number of assigned or “booked” hours per job, regardless of the actual time it takes the employee to perform the job. The employee is then paid a set amount of money for each flagged hour completed. Auto Mechanics & Technicians And FLSA Overtime Pay.

Piece Rate

Under this structure, a worker is paid a fixed piece rate for each unit produced or action performed, regardless of time. What is the FLSA Overtime Rate.

Tip Pay

When an employee receives tips in additional to hourly pay, employers must comply with specific restrictions regarding tips and tip pools in order to take a credit against minimum wage. The Fair Labor Standards Act Protects Your Rights To Tips and
Department of Labor Updates Tip Credit And Half Time for Overtime Regulations.

2 Different Jobs at different rates

If a worker does two different jobs for the same employer and is paid at different rates, the regular rate of pay is calculated by averaging the rate based on the hours worked at each job or using the rate for the specific job worked after 40 per week Calculating Overtime FAQs.

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Restaurant owner opening his store's doors while looking at the sky

Employees who are paid in tips may be entitled to overtime, but the math involved in computing what they are owed is more complicated compared to non-tipped employees. Knowing the rules and understanding the calculations can help you determine whether you are eligible for overtime and exactly how much is due to you. If you’re a server, bartender, or someone else who is regularly paid tips, do you know what your rights to overtime are? Check with The Lore Law Firm. We help workers throughout the country receive the wages and overtime the law entitles them to.

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What Are the Basics About Overtime?

If you work over 40 hours in a week, those additional hours are considered overtime. Employees who are not exempt under the Fair Labor Standards Act (FLSA) must be paid time and a half for these overtime hours. That means you have to be paid 1.5 times your regular rate of pay as overtime compensation. If you are not paid overtime, your employer is essentially committing wage theft and can be held liable.

Some employees (including executives and professionals, as defined by the FLSA) are exempt from overtime rules. In other cases, however, an employee has the right to overtime but it is difficult to calculate just how much he or she should be paid. This is the case with tipped employees. A tipped employee, under federal law, is a worker who regularly receives more than $30 in tips per month.

How Tipped Employees Are Paid

It’s important to remember that overtime pay amounts to 1.5 times an employee’s regular rate of pay (for this reason, it is also known as time and a half). Therefore, knowing how tipped employees must be paid under federal wage laws is critical in calculating the amount of overtime the employee deserves. This analysis starts with understanding the employee’s regular rate of pay.

The employee’s regular rate of pay is the amount of direct cash wages (the hourly rate that a tipped employee is paid) plus the tip credit that is claimed by the employer. The tip credit is the amount of money that the employer can count from tips that were actually received by the employee and which can therefore be credited toward the employee’s wages. Since the direct cash wage is substantially less than the federal minimum wage, the tip credit is essential to meeting the employer’s minimum wage obligations.

Employers cannot claim a tip credit that is higher than the amount of tips that were actually received by the employee. It also cannot exceed the difference between the federal minimum wage ($7.25/hour) and the minimum direct cash wage of $2.13/hour, even if the employee earns more than that amount in tips. That means the maximum tip credit is $5.12/hour. Also, the tip credit claimed for overtime hours must be the same as the tip credit claimed for regular hours.

Although employers can pay tipped employees the direct cash wage of $2.13/hour, tips must make up the difference between this rate and the federal minimum wage of $7.25/hour. If they don’t, the employer must pay the difference. Note that many states have laws regarding tipped employees that provide greater benefits and protections for workers than federal law – you should also check for information on your state’s laws.

When the Tip Credit Can and Cannot Be Taken

Under Department of Labor regulations, an employer cannot take the tip credit for the time that an employee performs “directly supporting” (non-tip-producing) work that exceeds either:

  • 20% of the employee’s hours in a workweek (excluding any hours in which the employer does not take the tip credit); or
  • A continuous period of 30 minutes

Any time worked outside of the allowable tipped work duties must be paid at the federal minimum wage rate, with no tip credit permitted to the employer.

Example of a Tipped Employee’s Overtime Pay

Understanding the above information is important to determining the tipped employee’s required overtime pay. But the math is not always so straightforward. Some employers take advantage of this and manipulate the numbers to their advantage, hoping their employees won’t figure out that they are being cheated. A simple example will therefore help explain how much overtime a tipped employee is due.

Consider the following hypothetical scenario. An employer pays its employee the minimum direct cash wage of $2.13/hour. The employee works 50 hours a week and earns an average of $10 per hour in tips. As mentioned above, the first step is to calculate the employee’s regular rate of pay. A simple way to do so is as follows:

  • $7.25/hour (federal minimum wage) x 50 hours = $362.50
  • Since 10 of the 50 hours were overtime, the employee must be paid time and a half for those hours. So an extra half must be added in for those overtime hours. $7.25/hour x 0.5 x 10 hours = $36.25
  • The total amount the employee must be paid for the week is $362.50 + $36.25 = $398.75

But the next question is: on top of the direct cash wage, what does the employer actually have to pay versus what the employee received in tips? Remember, in this scenario, the employee earned an average of $10/hour in tips. The employer can claim the maximum tip credit of $5.12 per hour because what the employee actually received in tips exceeds this. Here is how the tip credit works into the calculation:

  • $5.12/hour x 50 hours = $256.00 (the total tip credit the employer can claim, which applies to all 50 hours since it must be the same for regular and overtime hours)
  • $398.75 – $256.00 = $142.75 (this is the amount the employer will have to pay the employee to ensure the employee is compensated for overtime)

Questions About Overtime? We Have Answers

The above calculations should make one thing clear: tips can complicate overtime pay. Some employers deliberately underpay their tipped employees, while others simply make a mathematical error. Either way, if you’re a tipped employee who works over 40 hours a week, you could be leaving substantial sums of money on the table. Don’t deny yourself the overtime pay you’ve earned. Contact The Lore Law Firm by filling out our client intake form to receive a free case review.

Commission pay employee consulting with a lawyer about his overtime pay

Overtime pay for employees who earn commissions is an area in which many employers run afoul of the Fair Labor Standards Act (FLSA). Although some commissioned employees are not entitled to overtime under the FLSA, they must meet strict regulatory guidelines to be exempt. Many workers are unaware of these rules and may falsely assume that they have no right to overtime. If you’re an employee who is paid a commission, and you want to know whether you qualify for overtime, The Lore Law Firm is here to guide you.

The Basics of Overtime and Commissions

Before determining whether you can seek overtime pay as a commissioned employee, it’s important to know the basics of both overtime pay and commissions.

Under the FLSA, employers must generally pay their employees overtime (at the rate of 1.5 times their regular hourly rate, also known as time and a half) for any number of hours worked above 40 during a week. If, for example, an employee works 45 hours in a week, 40 of those hours are paid at the regular hourly rate while 5 of those hours are considered “overtime hours” and must be paid at 1.5 times the regular rate.

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There are exemptions to this rule, one of which – provided certain criteria are met – is commissioned sales work. However, employers who violate the FLSA can be ordered to pay back wages and other compensation to affected workers.

Although most workers are hourly or salaried, some get paid a commission for their work. Commissions are common in such industries as retail, sales, service, finance and insurance. They are often paid as rewards for exceptional work, such as exceeding sales quotas or meeting other goals.

Employees can be paid on a straight commission, or they can receive a combination of regular wages (such as hourly pay) and commission. However, employers must pay their commissioned employees overtime unless an exemption applies.

When Commissioned Employees Are Exempt from Overtime

Commissioned employees are paid either a percentage of sales or a flat rate, regardless of the number of hours they work during a week. However, that does not necessarily mean the employee has no right to overtime. If you earn a commission, you are entitled to overtime unless your employer can claim an exemption under the FLSA.

To be exempt, a commissioned employee must meet the following requirements:

  • The employee must work for a retail or service establishment
  • The employee’s regular rate of pay must exceed 1.5 times the federal minimum wage (currently $7.25) for every hour worked in a workweek in which overtime hours are worked
  • More than half of the employee’s total compensation during a representative period (which cannot exceed one year) must come from commissions

Example of a Commissioned Employee Who is Exempt

With the above standards in mind, consider an employee who is paid a weekly commission of $1800. During the week, the employee works 50 hours. First, divide the $1800 by 50 hours. Whatever this value is must exceed 1.5 times the federal minimum wage rate of $7.25 per hour ($7.25 x 1.5 = $10.88/hour).

$1800/50 hour = $36/hour

Because the $36 per hour exceeds $10.88 per hour, this employee would be exempt from overtime pay.

What If the Employee Is Paid Regular Wages and Commissions?

Some employees are paid a combination of regular wages and commissions. The calculation becomes a little more complicated but is nonetheless essential to determining whether the employee is owed overtime.

The first step is to total the employee’s earnings (regular wages and commissions) during the week. Consider this example:

An employee is paid $15/hour and earns a weekly commission of $100. During the week, the employee works 50 hours. 50 x $15/hour = $750, and adding the $100 ends up with $850 in total earnings for the employee during the week.

Next, divide this total amount by the hours worked during the week to determine the employee’s regular rate of pay. In this case it would be $850/50 = $17/hour.

While the employee’s regular rate of pay for the week is more that 1.5 times minimum wage, they did not earn more than half of their total compensation from commissions. If this has been the norm, the employee would not be exempt and her hours worked above 40 during a workweek must be paid at the rate of time and a half. The employee’s pay should look like this:

$17/hour x 40 = $680 regular pay

$17/hour x 1.5 x 10 = $255 overtime pay

Total pay earned = $935

Are Outside Sales Employees Exempt?

A closely related question concerns employees who are engaged in outside sales. These workers are exempt from overtime pay if they meet the following:

  • The employee’s primary duty must be making sales or obtaining orders or contracts for services or for the use of facilities for which a consideration will be paid by the client or customer; and
  • The employee must be customarily and regularly engaged away from the employer’s place(s) of business

As defined by the FLSA, “sales” includes any sale, exchange, contract to sell, consignment for sales, shipment for sale, or other disposition. It also includes the transfer of title to tangible property, and in certain cases, of tangible and valuable evidence of intangible property.

Note that some outside sales employees became non-exempt inside sales employees while working from home during the pandemic lockdown. Once working from home and no longer making “outside” sales meetings, such workers no longer meet the requirements for the outside sales exemption and may therefore be entitled to overtime pay for the time period in which they worked primarily from home.

Are You Being Paid the Overtime You Deserve?

If you’re a commissioned employee and want to know about your right to overtime, reach out to The Lore Law Firm. We stand up for workers across the country who are not being paid the wages and overtime they deserve. You can get started today by filling out our free and confidential client intake form.

Overtime Pay for Salaried Employees

Overtime must generally be paid to an employee who works more than 40 hours in a given workweek. Because of this standard, many people naturally assume that only hourly workers can receive overtime. However, salaried employees can also qualify for overtime in certain cases, and be salaried non-exempt. If you earn a salary, you should know the circumstances in which you can still be entitled to overtime pay. The Lore Law Firm takes a look at this area of wage and labor law.

If you are paid on a salary basis, you should receive the same amount of pay for each week that you work regardless of the numbers of days or hours you work.

For example: If your weekly salary is $500 per week (which breaks down to $12.50 per hour based on a 40 hour week) and you work 35 hours for the week, you should still receive $500 in wages if you are paid on a salary basis. If you are paid on an hourly basis, you would only receive $437.50 (35 hours x $12.50).

Many employers will say “If you are paid a salary you are not entitled to receive overtime pay.” If you have heard this from an employer, you are not alone. However, this is not necessarily true. The way an employee is paid does not determine their right to overtime pay. Rather, it is an employee’s job duties that determine if they are exempt from the overtime rules. Even if you were told that you would be paid a certain salary regardless of how much you work, you may still be entitled to overtime pay.

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Are Salaried Employees Entitled to Overtime Pay?

While some salaried positions may be exempt, the job position must meet specific exemption criteria for the position not to be entitled to overtime pay.

There are 3 common overtime exemptions that require an employee be paid on a salary basis:

If you are paid on a salary basis but do not have the job duties listed under one of these exemptions, you are likely a non-exempt salaried employee and entitled to overtime pay. Contact an overtime law attorney today and get the legal help you deserve.

The following describes how overtime is calculated under different salary pay structures:

Salary for Workweek Exceeding 40 Hours: An employee who is paid a fixed salary for a workweek longer than 40 hours is still entitled to overtime pay unless their position is exempt. For example, if an employee is hired to work a 45-hour workweek for a weekly salary of $500, the regular rate is calculated as follows: $500/45 hours = $11.11. Because the salary is deemed to compensate the employee at straight time for all hours worked, the employee is due half-time pay for hours worked over 40: $11.11/2 x 5 = $27.77

Fixed salary for fluctuating hours: This is the method that some companies in the past used to refer to informally as “Chinese overtime”. The regular rate of an employee will vary from week to week. The regular rate is obtained for each week by dividing the salary by the number of hours worked in the week and cannot be less than the applicable minimum wage in any week. Since straight-time compensation has already been paid, the employee must receive additional overtime pay for each overtime hour worked in the week at not less than one-half this regular rate.

For example, if an employee is paid a salary of $500.00 per week on a fluctuating workweek basis and works 45 hours one week, their overtime pay is calculated as follows: $500/45 hours = $11.11 regular rate. Since their salary covers all hours worked at straight time, they are due half-time pay for hours worked over 40: $11.11 / 2 = $5.56 x 5 hours = $27.78.

To use this method:

  • the employee must have a work schedule with fluctuating hours, i.e., not be on a fixed schedule,
  • and must be paid a fixed salary that is meant to be straight-time compensation for all hours worked in a workweek, whether the employee works less than or more than 40 hours per week.
  • With almost no exceptions, no reduction in the salary may be made for short workweeks.
  • In addition, the salary must be large enough to ensure that the regular rate will never drop below minimum wage.

In May 2020, the Department of Labor has issued a new rule loosening the restrictions on employers’ use of the fluctuating workweek method (a/k/a “Chinese Overtime”) to calculate overtime pay for non-exempt salaried employees.

Because this method results in employees getting less overtime pay than under any other overtime calculation, workers’ rights advocates did not want to encourage more employers to use the fluctuating workweek method. The new rule allows employers to pay additional compensation based on the number of hours worked, such as bonuses, premium pay, or differential pay, in addition to paying a fixed salary and still take advantage of the fluctuating workweek method.

The Obama DOL did not allow the use of these payments if the employer wanted to use the fluctuating workweek method because it felt it would encourage employers to shift a large portion of employee compensation to bonus and premium payments which are usually only offered for less desirable shifts or working longer hours.  This new rule will likely go into effect around July 2021.

What Are The Basic Overtime Requirements?

Before discussing salaries and how they relate to overtime pay, it’s important to understand the fundamentals of overtime. As a general matter, an employee who works more than 40 hours during a week is entitled to time and a half pay (overtime) for those excess hours. This means they should be paid 1.5 times their regular hourly pay for hours worked over 40. The Fair Labor Standards Act (FLSA) requires this, along with the laws in each state.

There are, however, numerous exceptions to the law. One potential class of employees who may be exempt are those who earn a salary. But before assuming that you are not entitled to overtime merely because you are paid a salary, you should first know about the nature of the salaried worker exemption.

What Is The Salary Exemption?

The FLSA does not cover certain jobs which pay on a salary basis. In order for a salaried employee to be exempt from overtime pay, the following criteria must apply:

  • The employee must earn a salary above the minimum salary threshold of $684/week (or $35,568 per year) ($844 per week ($43,888/year) after July 1, 2024); and
  • The employee must meet the job duty qualifications for one of the FLSA’s overtime exemptions (see below)

“Salary basis” has a specific legal meaning. The employee must regularly receive a predetermined amount of compensation each pay period on a weekly, or less frequent, basis. This amount cannot be reduced because of changes in the employee’s work quality or quantity. The employee must receive the full salary to which he or she is entitled regardless of how many days or hours are worked per week.

Additionally, the Supreme Court has recently made clear that a day rate, no matter how high, does not meet the salary basis test. This means that even highly paid workers who receive a day rate (without any guaranteed salary), are entitled to overtime pay.

Required Job Duties

Merely being labeled a salaried employee does not necessarily qualify someone for an exemption. As mentioned above, the salaried worker must also meet the job duties test contained in federal regulations. Job titles alone do not determine whether an employee passes the test and is therefore exempt. Therefore, it is possible that a salaried employee can still qualify for overtime, either by not earning a high enough salary or by not meeting the applicable job duties test.

Executive Exemption

A salaried executive may be exempt from overtime pay if all the following criteria are met:

  • The employee must be compensated on a salary basis at a rate not less than $684 per week ($844 per week ($43,888/year) after July 1, 2024)
  • The employee’s primary job duty must be managing the business enterprise or managing a customarily recognized department or subdivision of the business
  • The employee must regularly direct the work of at least two other full-time employees or their equivalent
  • The employee must have the authority to hire or fire other employees (or, alternatively, the employee’s hiring, firing, promotion, demotion, and/or advancement suggestions must be given particular weight)

Administrative Exemption

The following tests must all be met for a salaried administrative employee to be exempt from overtime requirements:

  • The employee must be compensated on a salary basis at a rate not less than $684 per week ($844 per week ($43,888/year) after July 1, 2024)
  • The employee’s primary job duty must be the performance of office or non-manual work directly related to the management or general business operations of either the employer or the employer’s customers
  • This job duty must include the exercise of discretion and independent judgment with respect to matters of significance

Learned Professional Exemption

Here are the criteria that must be met for a salaried learned professional to be exempt from the FLSA’s overtime rules:

  • The employee must be compensated on a salary basis at a rate not less than $684 per week ($844 per week ($43,888/year) after July 1, 2024)
  • The employee’s primary job duty must be the performance of work that requires advanced knowledge; that is, work that is predominantly intellectual in character and requires the consistent exercise of discretion and judgment
  • The advanced knowledge must be in a field of science or learning
  • The advanced knowledge must be typically acquired by an extensive course of specialized intellectual instruction

Creative Professional Exemption

A salaried professional is not covered by the FLSA’s overtime requirements if these two criteria are met:

  • The employee must be compensated on a salary basis at a rate not less than $684 per week ($844 per week ($43,888/year) after July 1, 2024)
  • The employee’s primary job duty must be work that requires invention, imagination, originality, or talent in a field of artistic or creative endeavor

Computer Employee Exemption

Computer employees who are paid a salary are exempt under the overtime regulations in these situations:

  • The employee must be compensated on a salary basis at a rate not less than $684 per week ($844 per week ($43,888/year) after July 1, 2024)
  • The employee must be a computer systems analyst, computer programmer, software engineer, or another similarly skilled worker
  • The employee’s primary job duty must consist of at least one of the following:
    • The application of systems analysis techniques and procedures (including consulting with users) to determine hardware, software, or system functional specifications
    • The design, development, documentation, analysis, creation, testing, or modification of computer systems or programs (including prototypes) based on and related to user or system design specifications
    • The design, documentation, testing, creation, or modification of computer programs related to machine operating systems; or
    • A combination of the above

What Are Highly Compensated Salaried Employees?

A highly compensated employee who is paid on a salary basis will be exempt from overtime pay requirements. These are individuals who perform office or non-manual work and who get paid total annual compensation of $107,432 or more, as long as that pay includes at least $684 per week paid on a salary or fee basis ($844 per week ($43,888/year) after July 1, 2024). Highly compensated employees must customarily and regularly perform at least one of the executive, administrative, or professional job duties mentioned above.

Blue Collar Workers Must Be Paid Overtime

The previously described jobs are generally considered to be white-collar in nature. Blue-collar jobs, even if they are salaried positions, are not exempt from the FLSA’s overtime rules. These jobs are usually defined by manual labor and involve the use of repetitive operations of the hands, physical skill, and energy. Some examples are employees who work as:

  • Carpenters
  • Electricians
  • Mechanics
  • Plumbers
  • Ironworkers
  • Craftsmen
  • Operating engineers
  • Longshoremen
  • Construction workers and laborers
  • Welders
  • Heavy equipment operators

These workers are entitled to overtime under the FLSA, no matter how highly compensated they are.

How Salary Deductions May Affect You

Certain deductions may not be taken from a salaried employee’s pay in order for the employer to still claim the salaried employee exemption from overtime. An example would be a deduction because of the operating requirements of the business.

An employer cannot claim the overtime exemption if it has an “actual practice” of making improper deductions from an employee’s salary. Some criteria to be used in determining whether an employer has an actual practice of making improper deductions include (but are not limited to):

  • The number of improper deductions, especially in light of the number of employee infractions that warranted such deductions
  • The time period in which the employer made the improper deductions
  • The number and geographic location of both the employees whose salary was improperly reduced and the managers who were responsible for it
  • Whether the employer has a clearly communicated policy that allows or prohibits improper deductions

If it is determined that an “actual practice” of improper deductions exists, the exemption is lost during the time period of the deductions. Isolated or unintentional improper deductions will not result in loss of the exemption as long as the employer reimburses the employee.

If money has been deducted from your salary, it will therefore be critical how, why, and how often said deductions were made. You should consult with an experienced attorney to learn more.

Calculating Overtime Pay for Non-Exempt Salaried Workers

If a salaried employee is not exempt from the overtime rules (and therefore must be paid overtime), that worker’s regular rate of pay must first be calculated. This is done by dividing the employee’s weekly salary by the number of hours that the salary is meant to cover and then multiplying that amount by 1.5 (time and a half). Here’s an example:

A salaried employee who is entitled to overtime is paid a weekly salary of $700. This salary is meant to cover 40 hours of work each week.

Divide the $700 by 40 hours to calculate the regular rate of pay, which is $17.50. Next, multiply this regular rate of pay by 1.5 to determine the employee’s overtime rate. Here, it would be $26.25. Therefore, for any hours that the non-exempt salaried employee works over 40 during a week, that person would have to be paid $26.25/hour.

Let Us Review Your Salaried Overtime Situation

If you are unsure whether you are being paid enough to qualify as an exempt salaried worker or that the job duties you perform do not meet the FLSA’s exemptions, it is essential that you contact an experienced overtime attorney. The Lore Law Firm can review your situation. We can also help if you are not being paid the proper amount of overtime, since employers can often erroneously calculate the required rate.

To get started, fill out our free and confidential client intake form today.

Frequently Asked Questions About Salary & Overtime

I think I’m owed overtime pay, what should I do?

If you believe you are owed overtime pay, you should first find a law firm that represents workers in claims for unpaid overtime and discuss your specific situation with them to find out if you have a valid claim. You should be ready to share information regarding your position, such as your primary job duties, how many hours you work per week, how much you are paid, and any other payment information such as pay stubs.

How can I calculate what my overtime pay should be?

The calculation for overtime pay is your regular hourly pay rate × 1.5  × overtime hours worked. You can also use the overtime pay calculator on our site.

How do I prove the amount of time spent working overtime?

The Fair Labors Standards Act requires employers (not employees) to keep records of the amount of hours worked by each employee. If your employer does not keep record of overtime hours, a presumption will be granted to the employee in regard to their testimony that they worked those extra hours. Additionally, an employee can reference all types of other evidence to help establish the hours worked, including computer log ins, security swipes, emails/text messages and the testimony of coworkers.

If I am paid on a salary basis, can I still be entitled to overtime?

Yes, if you are a salaried employee who earns less than $35,568 yearly or $684 each week ($844 per week ($43,888/year) after July 1, 2024), you may be entitled to overtime pay if you work more than 40 hours a week. Even salaried employees who meet these earnings requirements may be entitled to overtime pay if their job duties do not involve management, supervision and/or operational decisions regarding the running of the business.

What is the difference between exempt and nonexempt employees?

The main difference is that exempt employees are not entitled to overtime pay, while nonexempt employees are. Find out if your job is exempt or non-exempt.

Have you ever stayed late at work, clocking in those extra hours, and found yourself puzzled over how your overtime pay is calculated? Hourly workers are often subject to complex wage laws that dictate how overtime is compensated. These laws can vary from federal to state levels, with specific guidelines on what constitutes overtime work. This is important information, as it ensures that you are fairly compensated for every extra hour you dedicate to your job.

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What Constitutes Hourly Pay?

Hourly pay is a wage system where employees are compensated based on the number of hours they work. This straightforward approach means you get paid a set rate for each hour on the job. Unlike salaried positions, where a fixed amount is paid regardless of hours worked, hourly employees track their work time, often using timesheets or clocking systems. This method is common in various industries, from retail and hospitality to manufacturing and healthcare, and is particularly suited for part-time or variable schedules. The clear advantage is the direct link between work hours and pay, offering flexibility and transparency in earnings.

Overview of Overtime Laws

Overtime laws are designed to ensure fair compensation for employees who work beyond standard hours. In the United States, the Fair Labor Standards Act (FLSA) sets the federal baseline for these laws, typically requiring time-and-a-half pay for any hours worked over 40 in a workweek. This means that if you’re an hourly worker, you’re generally entitled to 1.5 times your regular hourly rate for every hour worked past the 40-hour mark.

It’s important to note that state laws can vary and sometimes offer greater protections. For instance, some states, like California, mandate overtime for working over 8 hours in a day, in addition to the weekly threshold. These laws are vital in ensuring workers are compensated fairly for longer work hours, but understanding the specifics can be tricky, as they depend on both federal guidelines and varying state regulations.

Calculating Overtime Pay

Calculating overtime pay is straightforward once you understand the basics. Under federal law, overtime is typically paid at a rate of one and a half times your regular hourly wage. So, if you normally earn $15 per hour, your overtime rate would be $22.50 per hour. To calculate your total overtime pay, multiply this higher rate by the number of overtime hours worked. For example, if you worked 45 hours in a week, you’d have 5 hours of overtime. At the $22.50 rate, your overtime pay for that week would be $112.50. This calculation is based on federal standards, and some states may have different or additional rules, potentially leading to higher overtime pay.

Exemptions and Exceptions

It’s important to note that certain exemptions and exceptions exist in overtime laws, and not all hourly workers are eligible for overtime pay. The FLSA outlines specific categories for exemptions, often based on job duties and salary thresholds. For instance, managerial, professional, and certain administrative roles might be exempt, provided they meet certain criteria – including being paid on a salary basis, not hourly. Additionally, some industries have unique rules, like in the case of healthcare or transportation. Another notable exception is the “fluctuating workweek” method, where overtime is calculated differently for employees with varying hours each week. Each of these exemptions and exceptions has detailed requirements and may be treated differently under different state laws, so it’s important to be aware of your specific situation. If you’re unsure whether you qualify for overtime, reviewing your role against FLSA guidelines is a good starting point.

Your Rights and Employer Obligations

As an hourly employee, you have certain rights under overtime laws that your employer is obligated to uphold. Primarily, you are entitled to receive overtime pay for any hours worked beyond the standard 40-hour workweek, unless you fall under specific exempt categories. Employers are also required to keep accurate records of your hours worked and wages paid. It’s their responsibility to ensure that all compensation complies with federal and state laws. Violations of these laws, such as failing to pay proper overtime or misclassifying employees to avoid overtime pay, are serious offenses. If you suspect a violation, you have the right to raise the issue, and in some cases, may be eligible to claim up to double back pay for unpaid overtime.

What to Do If You’re Not Receiving Proper Overtime Pay

If you suspect you’re not receiving proper overtime pay, taking immediate and informed action is crucial. First, review your pay stubs and work hours to confirm discrepancies. It’s important to maintain detailed records of the hours you’ve worked, including any overtime. If you find inconsistencies, approach your employer directly for clarification. Misunderstandings can sometimes be resolved internally. However, if the issue persists, you may need to seek external assistance. This could involve filing a complaint with the U.S. Department of Labor’s Wage and Hour Division or consulting with an employment lawyer. It’s illegal for employers to retaliate against you for asserting your rights under the FLSA so don’t hesitate to pursue what you’re rightfully owed.

Are You an Hourly Worker With Questions About Overtime Pay?

At the Lore Law Firm, we are dedicated to advocating for your rights as an hourly worker. Our experienced team can help navigate the complexities of overtime laws, ensuring you receive the compensation you deserve. If you have concerns about your overtime pay, don’t hesitate to reach out through our free and confidential online client intake form. Together, we’ll work towards securing your fair wages.

Overtime Pay Laws for Day Rate Workers

“Day rate” or “daily rate” employees are paid a flat amount for each day worked, regardless of the number of hours they put in during each day. However, employers are still required by law to pay most day rate employees overtime for all hours worked in a week over 40.

Employers in many industries often pay workers as day rate employees, to whom they do not pay overtime. This type of overtime violation is commonly seen in various jobs in the oil and gas and refinery maintenance industries.

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Lawsuits have been brought, and back wages have been recovered, on behalf of all types of field service workers who were paid on a day-rate system, including but not limited to:

  • Field Specialists,
  • Field Operators,
  • Pipeline Inspectors,
  • Top Drive Technicians,
  • Service Supervisors,
  • Field Coordinators,
  • Tool Pushers,
  • Pumpers,
  • Lease Operators,
  • Mud loggers / Mud Engineers,
  • Field Engineers,
  • Completions Consultants,
  • Drilling Consultants,
  • Project Managers and
  • Water Truck Drivers

A hotbed of claims for unpaid overtime has been inspectors who are paid on a day-rate basis with no overtime premium.  All types of inspector jobs have been at issue, including:

  • welding inspectors
  • tank inspectors
  • safety inspectors
  • E&I inspectors
  • NACE coating inspectors
  • vendor inspectors
  • tie-in inspectors
  • directional drill inspectors
  • utility inspectors

Failing to pay overtime to day-rate workers saves employers substantial amounts of payroll and can deprive a worker of tens of thousands of dollars in hard-earned overtime pay. It is well worth the effort for day-rate employees to make sure they are not being deprived of the overtime pay they are entitled to.

Calculating Overtime For Day Rate vs. Hourly Employees

To calculate overtime for a day rate employee, the first step is to multiply the amount the employee is paid for a day’s work (the “day rate”) by the number of days the employee worked in the week. Next, divide this by the total number of hours the employee worked in the week. The result is the worker’s “regular rate” for the week. Finally, the “overtime rate” is half the regular rate, which the employee is then owed for each hour worked over 40 in the week.

Calculating overtime for an hourly employee is more basic. The overtime rate is again one half the regular rate, and an hourly employee’s regular rate is the same as his hourly rate, unless he receives additional compensation under a separate payment method. For example, if a worker’s regular hourly rate is $10 per hour, their overtime pay rate is $15 per hour.

  • Example:  Day Rate = $150 per day.  Work Days in the Workweek = 5 days.  Work Hours = 60
  • Regular Rate Calculation = $150 x 5 days = $750 / 60 hours = $12.50 Regular Rate
  • Overtime Pay Calculation = $12.50 x 1/2 x 20 Overtime Hours = $125 Overtime Pay
  • Total Pay for the Week: $750 Day Rate Earnings + $125 Overtime Pay = $875 Total Pay

In situations where employees routinely work over 40 hours per week, there are significant advantages for employers under the day rate scheme instead of the traditional hourly rate method. An hourly employee’s overtime rate does not change based on the number of overtime hours worked, but a daily rate employee’s overtime rate decreases as the number of hours an employee works increases.

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Employers Often Fail to Pay Overtime to Day Rate Employees

Many employers simply refuse to pay their day rate employees overtime at all. This occurs in conglomerates with thousands of employees, small businesses and all employers in between. A number of large energy and energy service companies have recently been sued for withholding overtime from their daily rate field service workers.

Employers Misclassify Hourly Employees as Day Rate

Many employers misclassify employees paid on this rate to take advantage of this difference in overtime pay. However, to qualify as a daily rate employee, the worker must actually receive a standard sum for each day worked. The worker’s day rate cannot change based in any part on the number of hours worked. Additionally, day rate employees may receive no other form of compensation for services from the employer. While certain payments that are not related to the number of hours worked (eg. gifts, expense reimbursements, bona fide profit sharing plan payments) are permitted and do not constitute “other compensation” for purposes of the day rate calculation, many common incentives that are in some way tied to the number of hours worked will invalidate the day rate plan.

Employers Misclassify Day Rate Workers as Independent Contractors

Further misclassification of day-rate workers occurs when employers attempt to label such workers as independent contractors (a/k/a 1099s) instead of employees. This is often done when such workers are provided through a third-party staffing company.

In this scenario, workers are treated as independent contractors and paid a flat amount for each day worked (the “day-rate”) without regard to the state or federal overtime laws that should apply. Given their job duties, day-rate pay, and the fact that such workers are in no way “running their own business” – they are properly classified as employees, not independent contractors, and legally entitled to receive at least time and a-half for each hour of overtime they work.

Contact Our Day Rate Overtime Pay Lawyers Today For a free and confidential case review

If you are paid on a day rate and believe that you have been denied overtime pay, we’re here to help. Our services are provided on a contingency basis, meaning you only pay if we successfully recover the wages you’re owed. If you would like to get more information, please call us or one of our attorneys at 1-866-559-0400, email us at mlore@overtime-flsa.com or submit your information using our convenient Case Evaluation form for a FREE and CONFIDENTIAL review of your circumstances.

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