Introduction
The concept of “day rate” pay is common in industries where labor needs fluctuate, such as construction, installation, and retail fixture assembly. Under a day rate pay structure, workers are paid a flat amount per day, regardless of the hours worked. However, this pay structure can raise issues about how overtime pay should be calculated. The recent overtime lawsuit involving DisplayMax and FixtureMax has brought renewed attention to these issues, highlighting the importance of properly calculating overtime compensation.
What is a Day Rate Worker?
A day rate worker receives a set amount for each day worked, rather than an hourly wage or a traditional salary. This arrangement can be attractive for both employers and employees, offering predictability and simplicity. However, confusion often arises about overtime eligibility: does a flat daily payment exempt workers from overtime pay under the Fair Labor Standards Act (FLSA)? The answer is typically no.
Overtime Laws and the FLSA
The FLSA requires that non-exempt employees be paid at least one and a half times their regular rate for hours worked beyond 40 in a workweek. A common misconception is that paying a day rate means employers are not required to pay overtime. In reality, unless a worker meets the strict criteria for one of the exemptions under the FLSA, overtime rules still apply. Most day rate employees are not exempt and therefore, entitled to overtime pay. When an employee is paid on a day rate basis, overtime pay is calculated by adding up the employee’s day rate earnings for the week and dividing those
Michael Lore
Founding Attorney
Michael Lore is the founder of The Lore Law Firm with over 25 years of experience in labor and employment law. He handles cases ranging from unpaid overtime and class actions to executive contracts and personal injury matters in courts nationwide.
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