Overtime and Wages
The Fair Labor Standards Act (FLSA) requires that non-exempt employees receive overtime pay equal to 1.5 x their regular hourly pay for any hours worked over 40 in a week (overtime). This can happen if employees work more than eight hours a day, or more than five days a week. An employer may require employees to work overtime hours, but the employer must give the employee overtime pay.
Many employers try to avoid paying overtime by simply paying their employees a salary, even though the employees are working more than 40 hours in a week. In such cases, the employees are still entitled to overtime pay if they are non-exempt. The overtime wages are calculated by dividing the weekly salary by 40 (or a bi-monthly salary by 80) to get the regular hourly rate and then multiplying that by 1.5 to get the overtime rate.
Overtime pay that has not been paid can still be collected up to two years from the date the pay was earned, and up to three years if the employer was consciously violating the law. In addition, where the employer’s failure to pay overtime is intentional, the employer can be required to pay an additional amount of money equal to the amount owed. This is known as liquidated damages and its intention is punish the employer.
Covered Employers
The FLSA’s overtime provisions do not apply to every company. Only companies whose gross receivables exceed $500,000 per year are required to pay overtime. But the $500,000 means the amount of money coming in, not the amount of profits the company received. So a small independent dry cleaners for example may make $700,000 in a year and be covered even though it has expenses of $400,000 and therefore has a profit of only $300,000. In addition, some cases have indicated that the $500,000 limit is an approximation and a company that makes a little less may still be covered. Note that, unlike discrimination laws or the Family and Medical Leave Act, the number of employees makes no difference.
Exempt v. Non-Exempt Employees
Unlike the Family and Medical Leave Act, it makes no difference how long you have worked for an employer. An employee is entitled to overtime pay in the first week that he works more than 40 hours. The key is that not all employees are covered by the law. The law differentiates between “exempt” employees – employees that are not covered by the law – and “non-exempt” employees who are covered by the law.
An employee who is paid by the hour and not by salary, is automatically non-exempt and is entitled to overtime pay for working more than 40 hours in a week. But one must actually be an employee and not an independent contractor (that is you must actually be an employee of the company and not be your own business doing work for the employer).
Generally, high paying executive, professional, or managerial jobs are exempt and therefore cannot get overtime pay. Executives are people who are officers of corporations have a very high degree of responsibility. Professionals are usually people who have to have special educational achievements like, lawyers, architects, doctors, and teachers. Managers are usually people who supervise others. But just because a job title is has the word “manager” in it does not make it exempt. The key is what work the job does.
There are also a list of particularized exemptions which include among others: computer analysts, salespeople, and servers in restaurants. Recent changes in the Federal laws have created more exceptions, but Illinois has recently passed its own law to preserve overtime for many workers. As a result, an employee in Chicago might have a better chance than one in Milwaukee. Therefore, it is important to have a Chicago employment lawyer review your claim.
Employer Tricks and Traps
Employers often make mistakes in deciding which employees are exempt and which are not. Sometimes they even try to trick employees into thinking that they are exempt (not entitled to overtime). You may still be entitled to overtime pay even if: 1) you are on a salary; 2) you have the word manager in your title; 3) your employer says you are an independent contractor (you might not be); or 4) your employer just tells you that you are exempt. Another common trap is for employers to pay employees their regular hourly rate for hours over 40 in a week. If you make $10 per hour and in a 50 hour week you are paid only $500 ($10 x 50 hours), you are still owed an additional $50 because the last 10 hours your overtime pay was $15, not $10. You should have gotten time and a half. These calculations can be tricky and you should review them with an employment lawyer or labor lawyer.
Unpaid Wages and Minimum Wages
Occasionally, an employer will simply fail to pay the employee. This is illegal. Employment is a kind of contract where the employee does work for the employer and in return the employer pays the employee. Employees do not work for free; they are not slaves. You have a legal right to be paid. In addition, the minimum wage in the United States changes periodically, and may differ from state to state. (This is another reason to use a Chicago employment lawyer if you are in Illinois, and an employment lawyer from your state if you are not.) With certain exceptions including various commission arrangements with sales people, or restaurant servers, the employer must pay at least the minimum hourly wage.
Retaliation
It is also illegal for an employer to retaliate against an employee for asking for his overtime pay, for contacting an attorney, or even filing a claim. If you complain of not receiving overtime pay and your employer fires you, you have a claim for retaliation. This is a separate violation of the law and you should definitely consult an employment lawyer.
If you have not been paid overtime, or have only been paid your regular wage for overtime hours, you may be entitled to more money. The overtime and wage laws are very complex, but the attorneys at Maduff & Maduff understand them and can help you. Give us a call.
For a few examples of overtime cases handled by Maduff & Maduff, please click on the link below:
03 C 4246
04 C 4209
04 C 7360
06 C 00485
06 C 6057
06 C 5955
07 C 0048
07 C 50129
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