In New Jersey and Pennsylvania, most employers are required to pay overtime compensation to non-exempt employees who work more than 40 hours in a week. Overtime pay is calculated as half of a worker’s usual hourly rate. This means that workers who work more than 40 hours per week must be paid one-and-one-half times their regular rate for each overtime hour worked. Some employees are not entitled to overtime compensation, however. Whether you are entitled to receive overtime compensation will depend on the number of hours you work, your job classification and duties, and federal and state law. The attorneys at Swartz Swidler can help you to determine whether you should receive overtime pay and help you to recover compensation if you have not been paid correctly.
Employers that must pay overtime
While most employers are required to pay overtime to their non-exempt employees, there are some exceptions. Employers that are covered by the Fair Labor Standards Act are subject to the overtime pay rules. In general, businesses are covered under the FLSA if they have $500,000 or more in annual revenues or if they perform work in interstate commerce. Working in interstate commerce includes much more than many people realize. For example, companies that mail letters to people in other states or who receive goods from suppliers that are located in other states work in interstate commerce and are subject to the FLSA’s overtime requirements.
Employees who are entitled to receive overtime pay
Covered employers are required to pay overtime compensation to eligible employees who work more than 40 hours per week. However, there are some exceptions to this requirement for exempt employees. Exempt employees are not entitled to receive overtime compensation and include the following categories of workers:
- Professional, administrative, and executive workers who are paid on a qualifying salary basis
- Independent contractors
- Certain computer professionals who are paid at least $27.63 per hour
- Outside salespeople
- Seasonal workers at recreational businesses, amusement businesses, organized camps, and religious or nonprofit educational conferences
- Small newspaper employees
- Newspaper delivery personnel
- Fishing operations workers
- Small farm employees
- Criminal investigators
- Certain types of switchboard operators
- Casual domestic babysitters and companions
Exempt professional, executive, and administrative employees
One of the most common exemptions that employers use is the exemption for white-collar employees. These include professional, executive, and administrative employees. However, some employers misclassify workers as an exempt professional, executive, or administrative employees that should be classified as non-exempt workers who are entitled to overtime compensation. To be classified as one of these types of exempt employees, you must receive a regular salary and spend the majority of your time at work performing tasks that require you to use your independent judgment and discretion.
The salary basis for exempt professionals, administrators, and executives
Exempt professionals, administrators, and executives must be paid at least a weekly salary of $684 per week as of Jan. 1, 2020. They must also receive the same salary each week no matter how many hours they work and regardless of the quality or quantity of the work they perform.
Employers may deduct pay from an exempt employee’s weekly salary in only limited situations. For example, an employee who takes time off from work under the Family and Medical Leave Act or takes a paid vacation or sick leave may have their salaries reduced for those weeks. Employers may not dock an exempt worker’s salary for performance issues, however. If an employer does so, the worker is considered to be a non-exempt worker who is entitled to receive overtime compensation.
Job duties of exempt professionals, administrators, and executives
Some employees who earn $684 or more per week are not exempt. To qualify as an exempt professional, administrator, or executive, your work must also require you to hold an advanced degree or require you to make high-level business decisions.
Exempt administrative employees are those who perform non-manual office work that directly relates to the business operations of his or her employer or its customers. They must be allowed to use their independent judgment or discretion to make decisions about significant issues.
Exempt executives must have primary duties of managing the business enterprise or a recognized department or division of it. The employee must also be required to supervise a minimum of two full-time employees and have the authority to fire and hire workers or to provide substantive input into firing and hiring decisions.
Exempt professional employees must either perform work requiring advanced knowledge in the fields of learning or science of a kind that is usually attained through advanced courses of study. Other professionals must have jobs that require them to use talent, originality, inventiveness, or imagination in a recognized artistic or creative field.
A professional employee’s primary duty must either be performing work that requires advanced knowledge in the field of science or learning, of a type that is usually attained through an advanced course of study; or performing work that requires invention, imagination, originality, or talent in a recognized creative or artistic field.
Determining when workers have worked overtime hours
The FLSA considers workers to have worked overtime when they have worked more than 40 hours in a week. If you have worked more than 40 hours in a week as a non-exempt employee, you are entitled to receive overtime pay for each of the extra hours. To calculate your overtime compensation, figure out your regular hourly rate. Your regular hourly rate includes all of the compensation that you are paid for your employment, including wages, performance-based bonuses, commissions, shift differentials, and prizes. Your hourly rate does not include items and money that you have received that were not intended to be included in your compensation such as reimbursements for expenses, employee perks, or gifts from your employer. Once you have calculated your regular hourly rate, multiply it by 0.5. This will be the overtime premium. Then, for each of the hours that you worked over 40 in a week, add your overtime premium to your hourly rate.
Get help from the employment law attorneys at Swartz Swidler
If you believe that you have been misclassified as an exempt worker and are owed overtime pay, you may have legal options to recover the compensation you should have received. Contact the employment law attorneys at Swartz Swidler for a free case evaluation by calling us at 856.685.7420 or by filling out our online contact form.