overtime Archives - Shavitz Law Group

March 24, 2014March 19, 2022

Overtime for Administrative Employees?

While most employees are entitled to overtime under the Fair Labor Standards Act (FLSA’s), there are exceptions, known as “exemptions”. One such exemption is the administrative exemption. An employee who satisfies the requirements for this exemption need not receive overtime for hours worked over 40 in a work week.

To be covered by the administrative exemption, an employee has to satisfy three (3) requirements:

(a) the employee must be compensated with a salary not less than $455 per week;

(b) the employee’s primary duty must be the performance of office or non-manual work directly related to the management or general business operations of the employer or the employer’s customers; and

(c) the employee’s primary duty includes the exercise of discretion and independent judgment with respect to matters of significance.

Notably, an employee must satisfy all three requirements to be exempt from overtime.

The first requirement is self-explanatory. However, President Obama recently announced that he intends to raise the $455 per week threshold. This would mean that employees making more than $455 per week would not fall within the exemption and therefore be entitled to overtime. The new threshold has not been announced, but will have the effect of more employees being eligible for overtime.

An employee’s primary duty is the main or most important duty he or she performs. There is no set amount of time an employee has to spend on certain duties for them to be considered his primary duties. Instead, in addition to considering the amount of time spent on specific duties, courts also look at the relative importance of the exempt duties as compared to other types of duties performed by the employee.

Generally, the exercise of discretion and independent judgment involves the comparison and the evaluation of possible courses of conduct and acting or making a decision after the various possibilities have been considered. Other considerations regarding whether an employee exercises independent judgment are whether: (a) the employee is free from direct supervision; (b) has trouble shooting or problem solving responsibilities for the company; (c) sets budgets; or (d) has contact with the public or is considered the “face” of the company. The fact that an employee’s decisions may be revised or reversed after review does not mean that the employee is not exercising discretion and independent judgment.

These requirements are very fact-specific and need to be evaluated on a case-by-case basis. In addition, with the Obama administration’s new regulations, percentages will be set so that an employee who does clerical work the majority of the time, but sometimes performs administrative functions involving discretion and independent judgment, will still be eligible for overtime. Again, this will increase the number of employees eligible for overtime.

The administrative exemption is one of the more vague exemptions under the FLSA. Consequently, employers frequently misapply it. Shavitz Law Group, P.A. has handled numerous claims relating to this exemption. If you desire to discuss whether you may be misclassified as exempt from overtime, and therefore entitled to overtime wages, please contact us at 800-616-4000 or by email at [email protected]

March 12, 2014March 19, 2022

Obama’s Overtime Law Changes: What it Means for Employees and the Economy

On March 13, 2014, President Obama will direct the Department of Labor to revamp its regulations so that more workers will be entitled to overtime wages. Since 2004, when the current regulations were last revised, employers have been able to take advantage of certain exemptions for employees they characterize as manager/executives, administrators, or professionals. With the new changes, fewer employees will fit the criteria for these exemptions, with the effect that more employees will be eligible for overtime pay.

President Obama does not need Congressional approval for the changes. He has directed the Secretary of Labor to expand the availability of overtime by executive order.

These new regulations will affect millions of workers across the United States in almost every sector of the economy – from fast food workers to computer technicians to clerical workers. The net result of the new regulations is more money in workers’ pockets. By boosting workers’ spending power, this increase in wages will have a positive net effect on the economy. Accordingly, these new regulations will benefit on the country as a whole.

The new changes will affect the criteria for the exemptions in two ways. The new regulations will increase (1) the “salary basis” requirement; and (2) the percentage of time a so-called exempt employee spends actually managing or administrating.

As to the first change, under the present regulations, an employee need only make $455 per week to satisfy the “salary basis” requirement for these overtime exemptions. By raising the amount of the “salary basis,” fewer employees will qualify for the exemption. Because the “salary basis” is a mandatory requirement for these exemptions, if fewer employees can satisfy the salary basis, the more employees will be eligible for overtime.

For workers, raising the salary basis requirement will be a win-win. Either workers who previously were not eligible for overtime because they made more than $455 (say, $460 per week, or $23,920 per year, which is barely above the 2013 poverty guidelines for a family of four) will now be eligible for overtime wages; or employers who still want to take advantage of the exemption will have to raise the weekly salary to the higher threshold to be established by the new regulations.

As for the exact amount of the new salary basis threshold, those criteria may be raised to reflect the present-day value of the current $455 per week. Given inflation, that would put the salary basis threshold around $533. However, the new threshold could be even higher. A White House official, speaking anonymously, noted that the Labor Department first set the salary threshold in 1975 at $250 per week, which would be $970 in today’s dollars. Whatever the new salary basis, it likely will have an automatic, built-in increase which would be tied to inflation.

As to the second change, the current regulations have been interpreted such that if an employee is “supervising” only 5% of the time, then that employee could be considered a manager who is exempt from overtime. Under the new rules, in order to trigger the managerial/executive exemption, there would be a threshold percentage of time spent supervising.

This also is good news for employees who engage in manual or clerical labor for 45, 50, or even 60+ hours per week, but who are conveniently classified as “managers” because they are given some token authority to supervise other employees for a small percentage of their time. In reality, these so-called managers really are performing the same duties as the workers they supposedly are supervising – who are eligible for overtime. These new regulations will negate the token authority and require employees to exercise real supervisory control over other employees for a significant percentage of their time before they could be considered an executive who is exempt from overtime wages.

One other positive effect may be that employers will opt to hire more employees rather than pay additional overtime wages, which in turn would decrease unemployment.

December 16, 2013March 19, 2022

Federal Employees Entitled to Overtime Pay

Private sector employees are not the only ones eligible for overtime pay. Many Federal employees are legally entitled to receive overtime pay too. The Fair Labor Standards Act (the “FLSA”) requires the federal government to pay most federal employees overtime when they work more than forty hours in a workweek. There are, however, a number of differences that govern the application of overtime pay to federal employees.

One frequently encountered violation of the FLSA is that many federal employees who are employed at or above certain job grades are often automatically assumed to be exempt from overtime pay under the FLSA. For example, many agencies automatically exempt employees who work at the GS-11 and GS-12 grade levels and above from the right to receive overtime pay. This is not always true, however, and many federal employees are illegally denied overtime pay to which they are entitled. The FLSA requires employers, including the federal government and federal agencies, to examine the actual job duties performed by an employee in order to determine whether that individual is exempt under the law and properly denied the right to receive overtime pay.

Like private sector employees, non-exempt workers who are employed by the federal government and federal government agencies are entitled to receive overtime pay at one and one-half times their regular rate of pay when they work more than forty hours in a workweek. One difference is that for federal employees, paid leave hours are included as hours of work. In determining a federal employee’s regular rate of pay for purposes of calculating their overtime rate, all additional premium pay and non-discretionary or regular bonuses also are generally included as part of the hourly rate of pay. In addition, for many federal employees, overtime is payable if the employee worked in excess of eight hours in a single day, not just in excess of forty hours in a week.

Different rules apply to employees who receive administratively uncontrollable overtime. Different overtime rules also apply to law enforcement and fire protection employees. Some federal employees who are not entitled to overtime pay under the FLSA may be entitled to overtime pay under Title 5.

If you are a current or former employee of the United States Federal Government or one of its agencies and have questions about your overtime rights, contact the Shavitz Law Group.

November 19, 2013March 18, 2022

Overtime Compensation for Employees Paid By Piece Rate

Employees who are paid on a piece-rate basis are entitled to overtime, although they may not be aware of their rights. “Piece rate” means that employees are paid a specific amount of money for each item they produce or task they perform. For example, when cable technician is paid $15.00 for each utility line located, that employee is being paid on a piece rate basis.

Notwithstanding the right of piece rate employees to overtime, some employers engage in various practices which deprive piece-rate employees of overtime compensation. Such unlawful practices violate the Fair Labor Standards Act, the federal overtime and minimum wage law.

Overtime compensation for piece rate employees is properly calculated by taking the total piece rate compensation earned by the employee in a given week, and then dividing it by the total number of hours the employee worked for that week. The quotient of that division is the regular hourly rate of pay for the employee for that week. To determine the employee’s overtime rate, you would then divide the regular rate of pay by 2. The quotient of that division is the overtime rate. The employee’s overtime compensation for that work week is the overtime rate multiplied by all hours in excess of 40 (overtime hours) that the employee worked that week.

While this calculation may sound complicated, an example demonstrates that the overtime for piece-rate employees is actually straight-forward:

A cable technician is paid on a piece rate basis. In a work week, the technician earned $1.000.00 in piece rate compensation, and worked 50 hours. Under this scenario, the overtime is calculated as follows:

$1,000.00 piece rate wages/50 hours = $20.00 regular rate

$20.00 regular rate/2 = $10.00 per hour overtime rate

$10.00 x 10 overtime hours = $100.00 overtime compensation.

Therefore, the cable technician is to be paid a total of $1,100.00 for the work he performed that week, which includes $1,000.00 in piece rate compensation and $100.00 in overtime compensation.

It is important to note that the overtime rate will fluctuate from week to week as the hours employees work and the piece rate compensation they earn each week fluctuate. In some instances, an employee’s regular rate of pay may fall below the minimum wage. In such a case, the employer is required to pay the employee the difference in compensation to ensure the employee is paid at or above the applicable minimum wage. If the employer does not do this, the employee may have a claim for unpaid minimum wages.

Piece rate compensation plans are most common in ‘”blue collar” professions, such as cable technicians, air conditioning technicians/installers, plumbers, and electricians.

November 18, 2013March 19, 2022

Police, Firefighter and Paramedics and Overtime Pay

Pursuant to the Fair Labor Standards Act (“FLSA”), police officers, firefighters and paramedics are entitled to overtime. Significantly, there are specific rules under the FLSA that apply to police officers, firefighters and paramedics. Traditionally, employees covered by the FLSA are entitled to overtime pay for the hours they work over 40 in a workweek (7 days). However, under the FLSA, public-sector (government) employers can establish special “7(k) work periods” which changes the traditional 40-hour “threshold” that a police officer, firefighter or paramedic must work before earning overtime pay.

Under 29 USC §207(k), a public-sector employer may choose a 7(k) work period, ranging from 7 days to 28 days. Depending on the period chosen, the FLSA specifically prescribes a certain number of hours that police officers, firefighters or paramedics must work before they beginning earning overtime. See 29 CFR 553.230. For example, if a 7 day period is chosen, police officers must work at least 43 hours in 7 days before they can beginning earning overtime. Firefighters and paramedics on the other hand would have to work at least 53 hours in 7 days before they begin earning overtime. Separately, if a 28 day period is chosen, police officers would be required to work at least 171 hours within 28 days before they begin to earn overtime (i.e., roughly 6.11 hours per day) while firefighters and paramedics would be required to work at least 212 hours in 28 days (i.e., roughly 7.57 hours per day).

In addition to altering the work period which in turn triggers the overtime threshold, the FLSA also separately defines what can be considered “compensable time” for police officers, firefighters and paramedics. “Compensable time” affects whether such employees have met the threshold at which they will start earning overtime pay. The regulations define “compensable time” for police officers, firefighters and paramedics to include:

all of the time during which an employee is on duty on the employer’s premises or at a prescribed workplace, as well as all other time during which the employee is suffered or permitted to work for the employer. Such time includes all pre-shift and post-shift activities which are an integral part of the employee’s principal activity or which are closely related to the performance of the principal activity, such as attending roll call, writing up and completing tickets or reports, and washing and re-racking fire hoses.

29 CFR 553.221. For example, under this regulation, even time spent taking care of a K-9 unit at an officer’s home has been considered by some courts to be compensable time under this definition as the care is closely related to the performance of the officer’s principal activity. See Hellmers v. Town of Vestal, 969 F. Supp. 837, 842 (N.D.N.Y. 1997) (“Time spent grooming, bathing, exercising, cleaning, and training the police dog is ‘required by the employer and is pursued necessarily and primarily for the benefit of’ the employer, and is thus ‘work’ under the FLSA.”). Such may not be the case for a non-public sector employee.

If you are employed as a police officer, firefighter or paramedic, it is often difficult to determine whether you have been fully compensated for all hours worked. The overtime laws applicable to your profession just are not the same “40 hour threshold” as they are for other employees. Thus, if you think you are not being fully compensated for all hours worked, you should consult with an attorney to review your particular situation. The law prescribes certain time limits to assert your claim for unpaid wages. Therefore, do not hesitate to contact an attorney if you believe your overtime rights have been violated, so that you do not waive your right to collect the wages you already have earned and to which you are entitled.

July 29, 2013

Did You Know That Certain Salaried Employees Are Entitled To Overtime Pay?

An Overview of the Three Criteria All Salaried Employees Should Review

Many of us believe that if we are paid a salary we are not entitled to overtime pay. But the truth of the matter is that being paid a salary does not determine your rights to overtime pay under the law. In fact, many employees are being cheated out of pay owed to them, simply because their employer told them they are salaried employees and “therefore not entitled to overtime pay.” Unfortunately, employers often misclassify their employees as exempt from overtime and deprive employees from these hard earned overtime wages.

A vocabulary lesson: Employees that are classified “exempt” are not entitled to overtime wages. Employees’ classified “non-exempt” must be paid overtime wages for any time that exceeds 40 hours in a work week. For the purpose of this discussion, just consider that exempt employees are considered ineligible for overtime pay. But, employers frequently intentionally or unintentionally misclassify their employees as exempt – which can illegally deprive them of overtime pay.

So how do you know if your job should be classified exempt or non-exempt under the law? The Fair Labor Standards Act, which is the Federal law that governs fair pay, outlines 3 tests we can use to help us determine whether an employee is exempt or non-exempt under the law:

The Salary Test – The employee must be compensated on a salary basis at a rate at least $455.00 per week to be considered exempt from overtime. The employee is paid on a salary basis if he/she can count on receiving a “guaranteed minimum” amount of money for any week he/she performs work. Employees who earn less than $455 per week should be paid overtime wages.
The Duties Test – Job titles do not determine exempt status. Banks typically have Assistant Managers in hundreds or thousands of their branches, an example of a title that can have little meaning. However, it is the actual job tasks an employee must complete and how the job fits into the employer’s overall operations which determine whether an employee is entitled to overtime pay. Thus, many employers assign a salaried employee a “glorified” title in order to make their employees think that they are not due overtime pay. Title is just one aspect of the Duties Test, but it is included since it is such a common misconception that the title of “manager” automatically entitles an employer to pay their employees a salary only for all of their work.
The Exemption Test – the employee does not fall under one of the exemptions for overtime under the Fair Labor Standards Act. (Professional Exemption, Administrative Exemption, Outside Sales Exemption, Executive Exemption, Computer Employee Exemption, Highly Compensated Employees Exemption.) http://www.dol.gov/whd/regs/compliance/fairpay/fs17a_overview.pdf

Determining the difference between exempt and non-exempt can be confusing and often takes an experienced employment attorney to analyze the law and the employee’s specific job duties, to determine whether the employee should be compensated for overtime wages.

So remember that being paid a salary in itself does not necessarily mean you are not entitled to overtime pay. If you feel that your employer may have misclassified you as exempt from overtime pay please contact the Shavitz Law Group for a free consultation at www.shavitlaw.com or 888-941-9111 or email us at [email protected].