Michael D. Lore, P.C.
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A. The FLSA is a very broad federal labor law that dates back to the Roosevelt Administration. Among its provisions, it contains the legal minimum wage provisions, establishes record keeping and child labor standards, and requires that most employees be paid time and one-half for all overtime "hours worked."
A. Work time under the FLSA includes nearly all time spent performing job-related activities. These can include activities performed while "off-the-clock", at the job site or elsewhere, whether voluntary or not.
Work can include "off-the-clock" time spent maintaining equipment, cleaning up, staying late after normal shifts without "putting in" for overtime, doing job-related paperwork at home, making and responding to job-related telephone calls, working through meals, and many other activities.
A. The word overtime is defined under the FLSA, and, in most cases, means all time actually worked in excess of 40 hours per workweek. (See the explanation of workweek below).
A. The term workweek means a period of 168 hours during 7 consecutive
24-hour periods a 7 consecutive day period. A workweek can begin on any day of the week chosen by the
employer, and each workweek stands alone; therefore, an employer cannot
average 2 or more workweeks when calculating overtime. If an employee works more than 40 hours in any 1 workweek,
regardless of how many hours were worked in the prior or following
workweek, they are entitled to overtime pay for those hours.
Example:
With a few
exceptions for special classes of workers, if an employee works 50 hours
in one workweek and then 30 hours the following workweek, they are
entitled to 10 hours of overtime pay for the first workweek, even though
the average for the two week period is 40 hours per week.
Q. What is the FLSA overtime rate?
A. Time and one-half the "regular hourly rate." If an employees regular pay is not expressed as an
"hourly" rate, their regular pay rate must be converted to an
hourly equivalent.
The
Department of Labor provides the following examples that are based on a
40-hour workweek:
Hourly rate -- (regular pay rate for an employee paid by the hour). If more than 40
hours are worked, at least one and one-half times the regular rate for
each hour over 40 is due.
Example: An employee paid $8.00 an hour works 44 hours in a
workweek. The employee is entitled to at least one and one-half times
$8.00, or $12.00, for each hour over 40. Pay for the week would be $320
for the first 40 hours, plus $48.00 for the four hours of overtime--a
total of $368.00.
Piece rate -- The regular rate of pay for an employee paid on a piecework basis is
obtained by dividing the total weekly earnings by the total number of
hours worked in that week. The employee is entitled to an additional
one-half times this regular rate for each hour over 40, plus the full
piecework earnings.
Example: An employee paid on a piecework basis works 45 hours in
a week and earns $315. The regular rate of pay for that week is $315
divided by 45, or $7.00 an hour. In addition to the straight-time pay,
the employee is also entitled to $3.50 (half the regular rate) for each
hour over 40 -- an additional $17.50 for the 5 overtime hours -- for a
total of $332.50.
Another way to compensate pieceworkers for overtime, if agreed to before
the work is performed, is to pay one and one-half times the piece rate
for each piece produced during the overtime hours. The piece rate must
be the one actually paid during nonovertime hours and must be enough to
yield at least the minimum wage per hour.
Salary -- the regular rate for an employee paid a salary for a regular or
specified number of hours a week is obtained by dividing the salary by
the number of hours for which the salary is intended to compensate.
If, under the employment agreement, a salary sufficient to meet the
minimum wage requirement in every workweek is paid as straight time for
whatever number of hours are worked in a workweek, the regular rate is
obtained by dividing the salary by the number of hours worked each week.
To illustrate, suppose an employee's hours of work vary each week and
the agreement with the employer is that the employee will be paid $420 a
week for whatever number of hours of work are required. Under this
agreement, the regular rate will vary in overtime weeks. If the employee
works 50 hours, the regular rate is $8.40 ($420 divided by 50 hours). In
addition to the salary, half the regular rate, or $4.20 is due for each
of the 10 overtime hours, for a total of $462 for the week. If the
employee works 60 hours, the regular rate is $7.00 ($420 divided by 60
hours). In that case, an additional $3.50 is due for each of the 20
overtime hours, for a total of $490 for the week.
In no case may the regular rate be less than the minimum wage required
by FLSA.
If a salary is paid on other than a weekly basis, the weekly pay must be
determined in order to compute the regular rate and overtime pay. If the
salary is for a half month, it must be multiplied by 24 and the product
divided by 52 weeks to get the weekly equivalent. A monthly salary
should be multiplied by 12 and the product divided by 52.
Q. Other than my "base" pay, should any other payments I receive (eg. Bonuses)
be taken into account when calculating my overtime rate?
A. In most cases Yes. Unless your bonus is completely discretionary on the part of your employer, it must be included in determining your regular rate of pay. If your bonus is tied to achieving certain preset goals, quotas or other requirements, it is not considered to be discretionary.
Q. What types of employees are entitled to overtime pay which are not?
A. There are two types or categories of employees, exempt and non-exempt. Exempt employees are those who, due to their job duties, are not
legally entitled to overtime and are, therefore, exempt from the
laws regarding overtime pay. Non-exempt
employees are those whose job duties do not fit within any of the
exemptions provided for under the FLSA and are, therefore, entitled to
overtime pay.
The exemptions provided for under the FLSA are very limited and narrow, and
the burden is placed on the employer to prove that any given employee or
class of employees is not exempt.
While the issue of exemptions can be complicated, the following is a general
overview of the primary tests devised by the Department of Labor:
Executive Exemption
To qualify for the executive employee exemption, all of the following tests must be met:
The employee must be compensated on a salary basis (as defined in the regulations) at a rate not less than $455
per week;
The employees primary duty must be managing the enterprise, or managing a customarily
recognized department or subdivision of the enterprise;
The employee must
customarily and regularly direct the work of at least two or more other
full-time employees or their equivalent; and
The employee must
have the authority to hire or fire other employees, or the employees
suggestions and recommendations as to the hiring, firing, advancement,
promotion or any other change of status of other employees must be given
particular weight.
Administrative Exemption
To qualify for the administrative employee exemption, all of the following tests must be met:
The employee must be
compensated on a salary
or fee basis (as defined in the regulations) at a rate not less than $455 per week;
The employees
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 employers customers; and
The employees
primary duty includes the exercise of discretion and independent
judgment with respect to matters of significance.
Professional Exemption
To qualify for the learned professional employee exemption, all of the following tests must be met:
The employee must be
compensated on a salary
or fee basis (as defined in the regulations) at a rate not less than $455 per week;
The employees
primary duty must be the performance of work requiring advanced
knowledge, defined as work which is predominantly intellectual in
character and which includes work requiring the consistent exercise of
discretion and judgment;
The advanced knowledge must be in a field of science or learning; and
The advanced knowledge must be customarily acquired by a prolonged course of specialized intellectual instruction.
To qualify for the creative professional employee exemption, all of the following tests must be met:
The employee must be
compensated on a salary
or fee basis (as defined in the regulations) at a rate not less than $455 per week;
The employees
primary duty must be the performance of work requiring invention,
imagination, originality or talent in a recognized field of artistic or
creative endeavor.
Computer Employee Exemption
To qualify for the computer employee exemption, the following tests must be met:
The employee must be
compensated either on a salary
or fee basis (as defined in the regulations) at a rate not less than
$455 per week or, if compensated on an hourly basis, at a rate
not less than $27.63 an hour;
The employee must be
employed as a computer systems analyst, computer programmer, software
engineer or other similarly skilled worker in the computer field
performing the duties described below;
The employees primary duty must consist of:
1) The application of systems analysis techniques and procedures, including
consulting with users, to determine hardware, software or system
functional specifications;
2) 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;
3) The design, documentation, testing, creation or modification of computer
programs related to machine operating systems; or
4) A combination of the aforementioned duties, the performance of which
requires the same level of skills.
Outside Sales Exemption
To qualify for the outside sales employee exemption, all of the following tests must be met:
The employees primary duty must be making sales (as defined in the FLSA), 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 employers place or places of business.
Highly Compensated Employees
Highly compensated employees performing office or non-manual work and paid total annual
compensation of $100,000 or more (which must include at least $455 per
week paid on a salary or fee basis) are exempt from the FLSA if they
customarily and regularly perform at least one of the duties of an
exempt executive, administrative or professional employee identified in
the standard tests for exemption (see above).
Blue Collar Workers
The exemptions provided for white collar employees do not apply to
manual laborers or other blue collar workers who perform work
involving repetitive operations with their hands, physical skill and
energy. Non-management employees in production, maintenance,
construction and similar occupations such as carpenters, electricians,
mechanics, plumbers, iron workers, craftsmen, operating engineers,
longshoremen, construction workers and laborers are entitled to minimum
wage and overtime premium pay under the FLSA, and are not exempt no
matter how highly paid they might be.
Police, Fire Fighters, Paramedics & Other First Responders
The exemptions also do not apply to police officers, detectives, deputy
sheriffs, state troopers, highway patrol officers, investigators,
inspectors, correctional officers, parole or probation officers, park
rangers, fire fighters, paramedics, emergency medical technicians,
ambulance personnel, rescue workers, hazardous materials workers and
similar employees, regardless of rank or pay level, who perform work
such as preventing, controlling or extinguishing fires of any type;
rescuing fire, crime or accident victims; preventing or detecting
crimes; conducting investigations or inspections for violations of law;
performing surveillance; pursuing, restraining and apprehending
suspects; detaining or supervising suspected and convicted criminals,
including those on probation or parole; interviewing witnesses;
interrogating and fingerprinting suspects; preparing investigative
reports; or other similar work.
Collective Bargaining Agreements
The FLSA provides minimum standards that may be exceeded, but cannot be
waived or reduced. Employers may, on their own initiative or under
a collective bargaining agreement, provide a higher wage, shorter
workweek, or higher overtime premium than provided under the FLSA.
Q. Can my employer make a "different deal" with me for overtime work?
A. In almost all cases no. Employers and employees who are covered by the FLSA are not free to bargain for either a wage that is below the minimum wage, or for work in excess of 40 hours per week without paying a premium (typically time and a half) for overtime hours. Many employers wrongly believe that they can cut a deal with employees to avoid paying overtime rates they cannot.
Q. What if I did not get permission or ask for the time I worked?
A. In most cases, failure to ask is not a defense for an employer in an FLSA case.
Q. How do I prove the amount of time I worked?
A. It is the employers obligation to maintain accurate and complete records of the time worked by employees. If an employer does not maintain proper records, the employee is entitled to recover based on good faith, reasonable and realistic estimates.
Q. What if I didnt report or ask for my overtime?
A. It probably does not matter. It is the employer's obligation to control and document your work. If the employer does not want work to be done it must prohibit it. Failure to ask for overtime is usually not a defense, unless the employer has a requirement and/or policy that all time be reported and actually enforces it, or if an employee's failure to report or ask means that the employer did not know (or have reason to know) work was being done.
Q. What if I get a "bonus" instead of overtime pay?
A. While some employers may offer to compensate employees for overtime work by paying some type of a bonus, this type of arrangement is not generally permitted by law.
Q. What if I get "Comp time" instead of overtime pay?
A. The granting of comp time instead of paying for overtime is not generally permitted, unless you work for the government.
Q. What if I agreed to work for a "flat salary"?
A. If an employee is covered by the FLSA, and most are, an employer cannot disregard an employees overtime hours even if the employee agreed to work for a fixed amount of pay, regardless of the number of hours actually worked. While the method of calculating the overtime due to the employee may vary, the employee is entitled to overtime pay for all hours over 40 worked during any given work week.
Q. What if I am a salaried employee?
A. The manner in which an employee is paid does not determine their right to overtime pay. Rather, it is an employees 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. Your right to overtime pay cannot be bargained away, avoided or refused.
Q. What if I am a Tipped Employee?
A. If an employer elects to use the tip credit provision, it must inform the
employee in advance and must be able to show that the employee receives
at least the minimum wage when direct wages and the tip credit allowance
are combined. If an employee's tips combined with the employer's direct
wages do not equal the minimum hourly wage, the employer must make up
the difference.
Employees must retain all of their tips, except to the extent that they
participate in a valid tip pooling or sharing arrangement. A tip pool can often be invalidated if
tips are shared with managers, dishwashers, cooks, chefs orothers who are not entitled to share in tips.
Q. What about highly paid Blue-Collar Workers?
A. In general, non-management employees in production, maintenance, construction and similar occupations such as carpenters, electricians, mechanics, plumbers, iron workers, craftsmen, operating engineers, longshoremen, construction workers and laborers are entitled to minimum wage and overtime pay, regardless of how highly paid they might be.
Q. What if I am an independent contractor?
A. There are specific legal
requirements for determining if someone is an independent contractor. Often times employers will label someone an independent
contractor when, in fact, they are not. There is no single rule or test for determining whether an
individual is an independent contractor or an employee for purposes of
the FLSA. The Supreme Court has held that it is the total activity or
situation which controls. Important factors to consider include:
1) The extent to which the services rendered are an integral part of the principal's business.
2) The permanency of the relationship.
3) The amount of the alleged contractor's investment in facilities andequipment.
4) The nature and degree of control by the principal.
5) The alleged contractor's opportunities for profit and loss.
6) The amount of initiative, judgment, or foresight in open market competition with others required for the success of the claimed independent contractor.
7) The degree of independent business organization and operation.
While most true independent
contractors are not entitled to overtime, if you are being misclassified
as one, you are entitled to receive overtime pay.
Q. What about retaliation for making a claim for overtime?
A. The FLSA is aimed at protecting the rights of employees and forbids an employer from retaliating against an employee who files a complaint or participates in a legal action to collect overtime pay. An employer who willfully retaliates can be subject to a fine and even imprisonment.
Q. What can I do to protect my FLSA rights?
A. You can file a complaint with the U.S. Department of Labor or hire an attorney to assist you and possibly file a private lawsuit. Private lawsuits are the way in which most employees recover unpaid overtime.
Q. If I am successful, what will I receive?
A. When plaintiffs prevail, they are entitled to recover all unpaid overtime for two or sometimes three years prior to the filing of a lawsuit. In almost all cases, they are additionally entitled to an award of liquidated damages equal to the amount of the unpaid overtime. This means that a successful employee can recover two times the amount of unpaid overtime. A successful plaintiff can also be awarded attorneys fees and expenses.
Q. Will I be taxed on my recovery?
A. Since you are recovering money that is owed to you for unpaid wages that would have been taxed had they been properly paid, the recovery will be taxed as income to you.
A. In most cases, a Plaintiff can recover unpaid overtime for work done for two (2) years prior to a lawsuit being filed. In some instances, unpaid overtime can be recovered for work done for three (3) years prior to a lawsuit being filed. It is important to know that only the filing of a lawsuit "stops the clock." Complaining to your employer or the Department of Labor does not "toll" the FLSA statute of limitations.
A. While most cases settle prior to a trial, the process can take from several months to several years. There are many factors that impact the timing in an FLSA case, including where the case is filed, the amount of discovery and investigation required, the number of plaintiffs involved and the attitude of the parties.
Q. How do the lawyers get paid?
A. While there is no standard arrangement, we handle overtime cases on a contingent fee basis. What this means is that our fees will be calculated as a percentage of any recovery or judgment we obtain for the client(s). We will advance all expenses relating to the case.
Q. What is Chinese Overtime?
A. If an employee is paid a fixed salary each workweek for hours that vary up and down from week to week, the employer may use an overtime calculation method called "fixed salary for fluctuating workweeks". This is the method that some companies in the past used to refer to informally as "Chinese overtime". It is easily the most favorable method for employers of computing overtime, but certain requirements have to be met. 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 such a situation, the regular rate is determined by dividing the fixed salary by the number of hours worked that week. Since the fixed salary is already deemed to compensate the employee at straight time for all hours worked, any overtime hours only need to be paid at "half-time", instead of time and a half. The employee has already been paid straight time by virtue of the salary, and the straight time is only paid once, so the overtime hours will be paid at half the regular rate, thus bringing the employee up to time and a half. In workweeks in which the overtime is high, the regular rate will be low, and the employer will enjoy a lower per-hour overtime cost. The drawback for the employer is that if work is slow, and the employee is only working 25 or 30 hours per week, the fixed salary must still be paid.
Q. I heard that the minimum wage was increased, what is the new minimum wage rate and when did it go into effect?
A. Workers who are covered by the FLSA are entitled to a minimum wage of not less than $5.85 per hour effective July 24, 2007. Prior to July 24, 2007, the minimum wage rate was $5.15 per hour.
Q. I work in California. Am I entitled to paid lunch breaks and/or other paid breaks?
A.
Yes. Under California state law, many workers are entitled to take uninterrupted half-hour lunch breaks and regular paid ten minute breaks during shifts of 3 1/2 hours or more. California law provides that employees who are not permitted to take the meal and rest periods allowed under California Industrial Welfare Commission Wage Order No. 5 must be paid one additional hour of pay for each day that the rest periods are not permitted, and one additional hour of pay for each day that the thirty minute meal periods are not taken.
Q. Which states have laws that require workers to be given rest periods?
A. 7 States have rest periods requirements - California, Colorado, Kentucky, Minnesota, Nevada, Oregon, and Washington.
Q. I work as a Pharmaceutical Sales Representative and, although I often work more than 40 hours per week, am not paid additional compensation for overtime work. Are Pharmaceutical Sales Representatives exempt from FLSA's overtime requirements?
A.
This issue is currently being decided in the courts. Current and former pharmaceutical sales representatives have initiated individual and class action lawsuits alleging that they are entitled to overtime compensation because their employers improperly classified them as exempt under the Fair Labor Standards Act (FLSA) and similar state laws. Under the FLSA, non-exempt employees are entitled to overtime compensation for hours worked in excess of 40 hours per week, even if they are paid a salary.
Q. I am a Field Service Technician and must call in each day from home to get my day's schedule. Am I On The Clock from this point on?
A.
The question of whether initial activities start the clock has been a hot issue with field service technicians.
If a field service tech must start their day at home with a call to obtain that day's schedule, they are on the clock at that point, and all time until the end of the day must be paid. That includes traveling to the first job of the day, which for most employees would be unpaid commuting time.
Q. Although my job hasn't changed, I have been reclassified as non-exempt and now get paid for overtime. Shouldn't I have been paid overtime all along? Can I now recover my overtime pay for the period before I was reclassified?
A.
Yes. Your employer probably reclassified your overtime status because it discovered that you were previously misclassified. You may be entitled to recover your unpaid overtime wages going back two or three years prior to the reclassification.
Q. How do I get more information and answers to my questions?
A. Contact us and we can give you more information and review your specific circumstances. You can submit your information using the convenient online intake form, send an email or call Michael Lore.