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INFORMATION ON OVERTIME WAGE CLAIMS

INFORMATION ON OVERTIME WAGE CLAIMS

Most employees who work more than forty hours per week are entitled to be paid one and one half times their regular rate of pay for their overtime hours worked. This is commonly referred to as overtime pay. The law that governs whether an employee is entitled to be paid overtime pay is a Federal Statute called the Fair Labor Standards Act. The Fair Labor Standards Act is a very complex Statute which is filled with exceptions and exclusions covering certain types of employees and determining whether those employees are entitled to their overtime pay.

 

Most employees who are being paid on an hourly basis are entitled to overtime pay. In order to be properly paid for overtime hours, an employee should receive one and one half times their hourly rate of pay for their overtime hours. For instance, if a person was being paid $10.00 an hour, and during a weekly period worked more than forty hours in that week, the employee should be paid $15.00 an hour (one and one half times the hourly rate) for all hours worked over forty hours a week. This employee would earn $400.00 for the first 40 hours he or she worked, then be paid $15.00 per hour for any time above 40 hours.

 

Salaried employees are also covered under the Fair Labor Standards Act. Very often we will speak with an employee who is paid by salary who is told by their employer that because they are being paid on a salary basis, they do get overtime pay. This is definitely wrong. The only difference between a hourly paid employee and a salary paid employee is the way that their overtime pay is calculated is different.

 

To calculate overtime pay for a salaried employee, you divide the number of hours an employee works during a particular period, usually weekly or bi-weekly, into the salary amount for that same period. By doing so, you will be given an hourly rate by which the employee was paid during that work period. That hourly rate determines the amount that an employee is paid their overtime pay. For instance, if an employee is being paid $35,000.00 per year salary, their weekly salary would be $673.08 ($35,000.00 divided by 52 weeks). If an employee worked 45 hours during any particular week, their hourly rate would equal $14.96 ($673.08 divided by 45 hours). To determine that employees overtime pay, you would then divide that hourly rate of $14.96 in half, which equals $7.48. That employee would then be entitled to an additional $7.48 for each of those 5 additional hours of overtime that he or she worked during that weekly period.

 

Many employers approach employees and advise them that they are going to become a salaried employee, and attempt to describe that as being a benefit to the employee. Actually, being paid a salary usually works against employees who are working significant hours because the employee’s effective hourly rate will decrease with the more hours that employee is working. For instance, if you take that same employee that was earning $35,000.00 and working 45 hours a week, their effective hourly rate is $14.96. However, if you take that same employee who is earning $35,000.00 and have that employee work 50 hours a week, their effective hourly rate would actually drop to $13.46. If that employee continues to work more and more hours, their effective hourly rate, and their overtime premium will continue to fall.

 

Under the Fair Labor Standards Act, there are dozens of different classifications of employees, exemptions of employees, and requirements for certain employees, which determine whether an employee is entitled to be paid overtime pay. For basic information on certain categories of employees and whether they are entitled to overtime pay, the United States Department of Labor has an excellent website which briefly explains many of these classifications, qualifications and exemptions. The web site is

 

www.dol.gov/esa/fact-sheets-index.htm.

However, to fully explore whether you or someone you know is entitled to overtime pay, it is best to consult with an attorney who specializes in the field of wage and hour claims.

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