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Overtime
The federal law requiring employers to pay overtime to employees is the Fair Labor Standards Act (FLSA). Passed in 1938, the FLSA was enacted to ensure a number of different “fair labor standards,” most notably the requirement that most employees be paid overtime. Many states also have adopted wage and hour laws. Related articles on Overtime Generally, the FLSA requires most employers to pay overtime to employees who work more than 40 hours in a given workweek at a rate of one and one-half times the employee’s regular rate of pay. Exempt and nonexempt employeesDuring the last decade or two, employers have found it increasingly difficult to decide which employees are entitled to overtime and which aren't. Those classifications are commonly referred to as exempt employees (those who meet the FLSA's requirements to be exempt from overtime pay) and nonexempt employees (employees the law requires to be paid overtime). For each phrase used in a statutory requirement, there are thousands of pages -- of both regulations and case law -- explaining what it means. The laws governing the issue are imprecise, convoluted, confusing, and often contradictory. As a result, there has been a rapid increase in overtime lawsuits, including a 229 percent increase in the number of FLSA class-action lawsuits during the last several years. Who enforces federal overtime laws?The Department of Labor’s Wage and Hour Division (WHD) is responsible for administering and enforcing the FLSA. The WHD usually initiates an investigation of an employer’s overtime practices in response to an employee’s complaint. Isolated complaints on behalf of only one or a few employees may only result in a phone interview and small-scale investigation of the company, called “conciliation.” Multiple violations or complex cases may result in a full investigation by the WHD, involving employee interviews and subpoenas of the company’s records. The WHD administrator also may assess a civil penalty of up to $1,000 per violation for any repeated or willful violation the FLSA’s overtime provisions. Wage and hour documentationEmployers subject to the FLSA are required to make, keep, and preserve carefully documentation related to their employee’s wages, hours, and other conditions and practices of employment. The FLSA requires no particular method for maintaining records, but does require that they contain certain information about the employee and data about the hours worked and the wages earned.
Related articles on Overtime from the State Employment Law Letters
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