Five Myths About Overtime Pay Requirements

As part of the Fair Labor Standards Act of 1938, Congress instituted overtime wages for certain employees who work more than 40 hours in a week. Although the law has been in effect for nearly 80 years, employers and employees alike still have misconceptions about its protections.

One result of the lack of clarity is that some employers have seized upon this opportunity and denied overtime pay to their employees. One way they do this, as has been seen in the banking industry, is to misclassify workers into positions that are allegedly exempt from overtime pay. However, that is not the only misconception.

Here, we clear up five misconceptions about overtime.

1. Professionals Don’t Qualify for Overtime

Your job title doesn’t dictate whether or not you get overtime pay. Unless you are paid a certain amount, or your duties fall within a very narrowly defined scope, you must be paid overtime. Employees who make over $455 or more a week and are in a position with duties that the FLSA would consider management do not qualify for overtime.

However, some employees are given inflated titles to exempt them from overtime, even though their duties mean they are entitled to overtime.

For instance, some employers in the financial industry hire employees and give them an “analyst” title — suggesting they fall under a narrow exemption from overtime — even though their job duties don’t qualify them for an overtime exemption. This misclassification is illegal because only employees whose jobs involve actually managing people, or whose decisions carry weight within the organization, are exempt from overtime.

2. Working on Salary Exempts You from Overtime

Typically, salary workers are exempt from overtime because of their job duties or the amount of money they make, not simply because they are paid on salary. The FLSA currently exempts workers paid a salary basis of $455 a week or more, but anything less than that requires time and a half for every hour over 40 worked.

When an employee is paid by salary, overtime is calculated by converting the salary to its hourly equivalent. Therefore, the rate of overtime for a salaried employee varies based on the amount they are paid, and how that salary amount is converted to an hourly rate.

3. Those Little Tasks Aren't Worth the Overtime Fuss

According to the FLSA, all work done must be compensated whether you are paid hourly or work on a salary basis. This includes your entire shift time, including breaks and "nonproductive" time, which is time at work in which there’s nothing to do. In addition, all time spent by an employee performing work-related tasks that the employer requires or allows is considered work time.

This means, for example, that if you come in early to start work, stay late to finish work or work from home, you must be compensated as long as your employer knows or should know it is being done and permits you to do it. Your employer can’t deny you overtime.

4. Overtime Can Be Averaged Out Over Two Weeks

When overtime is calculated, it must be counted for the week it was worked in, no matter the employer’s pay cycle.

If you are paid biweekly and you work 35 hours one week and 45 the next week, your employer can not average the two weeks together and determine you are not owed overtime. In such a case you would deserve to get paid for five hours of overtime.

5. Comp Time is Acceptable Instead of Overtime

To get out of paying overtime in cash to employees, employers may offer comp time in lieu of cash. Comp time is extra time off given instead of the extra wages that are supposed to be paid for overtime.

According to the FLSA, all wages paid for overtime must be paid in cash. The only time comp time in lieu of actual money is acceptable is for hours worked up to 40 in a week when no FLSA overtime is worked.

For example, if you were scheduled to work 38 hours in a week and end up working 40, the extra two hours you work are not counted as overtime. Although, in this case comp time can be given as extra compensation, nothing more than the minimum age is required for those two extra hours worked.

So How Do You Fight Wage Theft?

If you suspect that you have been denied overtime based on some misconception of the law, you are entitled to your lost wages. Employees are protected from retaliation by the FLSA, so you don’t need to be afraid of losing your job if you come forward to claim lost wages. If you think you’ve unfairly been denied overtime, our overtime lawyers may be able to help. Contact us today for a free, non-binding case evaluation.