FLSA Overtime: Everything You Need to Know
FLSA overtime has been set by the Fair Labor Standards Act (FLSA). The FLSA is a law that outlines rules for both minimum wage and overtime.4 min read
2. Exempt Employees
3. Non-Exempt Employees
4. The FLSA Overtime
FLSA Overtime: Everything You Need to Know
FLSA overtime has been set by the Fair Labor Standards Act (FLSA). The FLSA is a law that outlines rules for both minimum wage and overtime and details requirements for minimum wage that are applicable to both employers and employees. Under the FLSA, there are two employee classifications that are used for overtime and minimum wage: exempt and non-exempt.
The requirements for minimum wage and overtime outlined in the FLSA can be applied differently depending on an employee's classification. In addition, other legal standards for child labor, minimum wage, and overtime can be applied alongside the FLSA.
Several states have passed their own labor laws. Some of these laws are much stricter than the FLSA, requiring higher minimum wages and rigid rules for overtime, as well as different child labor requirements. Currently, the minimum wage at the federal level is $7.25. For tipped employees, the federal minimum wage is $2.13.
Unlike other labor laws, there is no minimum employee number that requires employers to follows FLSA rules. However, not every employee is subject to the requirements of the FLSA. All employees under the age of 18 are protected by FLSA rules.
When a statutory exemption is applicable, an employer is not required to pay their employees for the mandated overtime or minimum wage.
Under the FLSA, there are two exemption categories:
- Employee exemptions for both minimum wage and overtime rules.
- Employee exemptions that apply only to overtime.
The Department of Labor (DOL) must frequently enforce rules as a result of the misclassification of employees by their employer.
An employer must be certain that employees they are treating as exempt actually fall into this category. If an employee is not truly exempt but is treated as such, their employer may be required to reimburse their lost income. Additionally, employers who misclassify their employees can face criminal prosecution and a $1,000 fine per violation or a one-time fine of $10,000.
A large purpose of the FLSA is setting overtime and minimum wage rates for non-exempt employees. As mentioned, the federal minimum wage is currently $7.25 an hour.
If an employee is under 20 years of age, their hourly wage cannot be less than $4.25 for the first 90 consecutive calendar days of their employment. This includes both days they have worked and days that they were off. Any employer who does not follow FLSA minimum wage rules may face monetary fines and potential imprisonment depending on the severity of the violation.
The FLSA Overtime
Under the FLSA, employers are not limited in the amount of workday or workweek hours they can request from their employees. However, if an employee works more than 40 hours in a week, their employer is required to pay them an overtime rate that equals one and half times their normal pay. To calculate overtime, an employer will need to know the employee's regular pay rate and the hours they worked in a week. It is possible for an employee's contract to contain a higher overtime rate than is dictated by the FLSA. Also, if a state labor law has stricter overtime rules than the FLSA, the state law must be followed.
The exception to this rule is if the employee is exempt from the FLSA overtime rules. If an employee is exempt, an employer does not have to pay them overtime wages, even when they work on a holiday, work on the weekend, work more than 40 hours in a week, or work more than eight hours in a workday.
When an FLSA overtime claim is filed, it is generally for one of three reasons:
- An employee was treated as exempt when they were not.
- Employees neglecting to document work they've completed "off the clock" that should have been compensated.
- Employers not providing wage augmentation for items like longevity pay when calculating overtime.
When an FLSA claim is filed, employees may receive compensation for:
- Off the clock work such as work completed during lunch, work completed at home, or work that takes place before or after an employee's regularly scheduled hours.
- Overtime pay that should have been given if the employee had been correctly classified as non-exempt.
The FLSA defines a workweek as seven consecutive days, and the typical overtime threshold is 40 hours. Any time an employee spends on work-related activities constitutes work time. An employer who does not want an employee to perform work that would qualify under FLSA rules must prevent their employee from working. Employers cannot benefit from employee work without providing them compensation due under the FLSA.
Time spent on training is considered work time if the training takes place during an employee's regular shift. Time spent traveling to and from work does not count as work time, even if it takes longer than normal or takes place in a work vehicle. Similarly, meal breaks do not count as work time if they last a minimum of 30 minutes, and the employee performs no work during this time period.
The FLSA allows for a sleep time exclusion of as much as eight hours for employees who work shifts of 24 hours or longer. However, there must be an agreement between the employer and employee, as well as a sleep facility, for this exclusion to be granted.
While a 40-hour workweek is standard, the FLSA allows for alternatives for police officers, medical care providers, emergency medical service providers, and firefighters.
The FLSA does not entitle an employee to work time. Employers are allowed to adjust employee's schedules as they see fit, even if it results in avoiding overtime. Non-government employees can have their FLSA wages paid either in money or compensatory time off when they work overtime.
Non-exempt employees are not required to receive an hourly wage under the FLSA and may receive a salary. However, if a non-exempt employee receives a salary, it must be converted to an hourly rate whenever they are entitled to overtime compensation.
If you need help with determining FLSA overtime, you can post your legal need on UpCounsel's marketplace. UpCounsel accepts only the top 5 percent of lawyers to its site. Lawyers on UpCounsel come from law schools such as Harvard Law and Yale Law and average 14 years of legal experience, including work with or on behalf of companies like Google, Menlo Ventures, and Airbnb.