How Do I Know if I Am Eligible for Overtime Pay?

There are two types or categories of employees, exempt and non-exempt. Exempt employees are those who are not legally entitled to overtime due to their job duties and, therefore, are “exempt” from the laws regarding overtime pay. Non-exempt employees are those whose job duties do not fit within any of the exemptions under the Fair Labor Standards Act (FLSA) and, therefore, are 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 exempt.

The most common exemptions under the FLSA are:

• Executive Exemption
• Administrative Exemption
• Professional Exemption
• Computer Employee Exemption
• Outside Sales Exemption
• Highly Compensated Employees

For further information on what type of employees are entitled to overtime pay, see this page.

The short answer is Yes – in almost all cases.

The Fair Labor Standards Act (FLSA) does not limit the number of hours in a day or days in a week an employee may be required or scheduled to work, including overtime hours, if the employee is at least 16 years old. It only requires that covered, nonexempt employees be paid overtime pay at a rate of not less than one and one-half times their regular rate of pay after 40 hours of work in a workweek.

Employers are free to set and enforce work schedules and the employees must comply with the schedule that is given to them. Employers can require employees to work overtime; however, they must properly pay non-exempt employees for any overtime hours they work.  See this page for further details.

In almost all cases the answer is 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.  In addition, many employees believe if they sign something stating the employer does not pay overtime, they are not entitled to overtime pay.  This is not the case.  Employees cannot waive their right to overtime pay.

In most cases, failure to ask permission to work is not a defense for an employer in an FLSA case.

The granting of comp time instead of paying for overtime is not generally permitted, unless you work for the government. In other words, private employers cannot give non-exempt employees paid time off in a later workweek in lieu of overtime pay.

Merely paying an employee on a salary basis does not mean the employee is not entitled to overtime pay.  Employers and employees get this wrong all the time.  While some salaried positions may be exempt – if they have the job duties listed under one of the the exemptions under the FLSA, if the employee does not have these exempt job duties, they must receive overtime pay after 40 hours even if they are salaried.  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.

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”.

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 or others who are not entitled to share in tips.

Most tipped employees are still entitled to overtime pay if they work more than 40 hours per week.  See this page for further details.

If you are not your “own boss”, you are probably not a true independent contractor, and are entitled to overtime pay. Workers who are properly classified as independent contractors (aka 1099 employees) are not legally entitled to overtime pay because they operate their own business and not employees so are not covered by the minimum wage and overtime laws (FLSA).  Misclassification of employees as independent contractors is very common and done to avoid the expense of overtime pay, as well as benefits such as healthcare, worker’s compensation, and unemployment insurance. To learn more about whether you are properly classified as an independent contractor, see this page.

While some employers may offer to compensate employees for overtime work by paying some type of a bonus for overtime work, this type of arrangement will generally not satisfy the overtime pay requirements.

In fact, unless your bonus is completely discretionary, it must be included in determining your “regular rate” of pay when calculating overtime pay.

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 for an employer, 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.

Often employees feel pressured to work off the clock or take work home because their employer overloads them with work but will not approve overtime.  An employer cannot sit back and accept the benefits of an employee’s work without paying for this time. Merely making a rule against such work is not enough. Since the employer has the power to enforce the rule, they must make every effort to do so or pay the employee for the work done.