Most employers in the U.S. are required to pay an overtime premium to non-exempt workers who work more than 40 hours per week. This premium is based on the worker’s normal hourly wage and is 50% of it. An employee who works overtime hours must be paid one-and-one-half times his or her regular hourly wage for each overtime hour that is worked. There are exceptions to the overtime laws. Some employees are not entitled to receive overtime. If you believe that your employer should have paid overtime compensation to you, talk to the attorneys at Swartz Swidler.
Weekly overtime standard vs. daily overtime standard
Most states have a weekly overtime standard. In these states, employees who work more than 40 hours during a workweek are entitled to overtime pay. A few states follow a daily overtime standard. In these states, employees who work more than eight hours in a day are entitled to overtime compensation for the additional hours worked. New Jersey and Pennsylvania follow the weekly overtime standard, however.
Which employers are required to pay overtime?
While most employers are required to pay overtime compensation to their workers, some are exempt from the overtime rules. Companies are covered by the Fair Labor Standards Act if they earn $500,000 or more in annual revenues. Smaller businesses are still subject to the overtime requirements if they engage in interstate commerce. Engaging in interstate commerce can include everything from mailing things to out-of-state locations to handling goods that have come from another state. This means that nearly all businesses are required to pay overtime compensation.
Employees who are entitled to receive overtime
Employees are entitled to receive overtime compensation for each hour that they work beyond 40 per week unless they meet an exception. Several categories of workers are considered to be exempt from the overtime rules, including the following:
- Independent contractors
- Executive, professional, and administrative professionals who are paid on a salary basis and who meet the duties test
- Outside sales professionals
- Computer specialists who earn a minimum of $27.63 per hour
- Seasonal or recreational employees
- Employees of religious or educational centers or camps that operate for less than seven months per year
- Certain employees of small newspapers
- Fishing workers
- Newspaper deliverers
- Workers on small farms
- Certain operators of switchboards
- Criminal investigators
- Casual babysitters and companions of the disabled
- Administrative, professional, and executive employees
The most common types of exempt employees are professional, administrative, or executive workers. As long as these workers meet the salary and duties tests, they are considered to be exempt and not entitled to overtime compensation.
Exempt executives, administrators, and professionals must be paid a minimum salary each week and must spend the majority of their time performing duties that require them to use their independent judgment and discretion.
Exempt professionals, administrators, and executives must be paid a minimum salary of $684 per week. The same salary must be received by the employee every week no matter the number of hours that hey or she works or the quality of his or her production. Employers cannot dock the pay of workers who work less than 40 hours a week or who produce less during a week. If an employer docks an exempt employee’s salary, the employee is non-exempt and must be paid overtime compensation.
In certain cases, an employer can pay an exempt employee less than his or her full salary. For example, an employee who misses a full day of work during the first or last week of employment may be paid a reduced salary for that week.
In addition to the minimum salary requirements, exempt workers must also have jobs with duties that directly relate to the business operations of the company, are supervisory or managerial, or require an advanced degree. Exempt professionals, administrators, and executives must be able to make high-level business decisions.
To meet the administrative exemption, an employee must perform non-manual work that directly relates to managing the business operations of the company or its customers. These workers must also be authorized to use their independent judgment and discretion to make decisions about substantial issues.
To meet the executive exemption, the worker’s main duty must be to manage a division, department, or the enterprise itself. The executive must be involved in the regular supervision of two or more full-time workers and must have the ability to fire and hire workers or to provide substantive input into hiring and firing decisions.
To meet the professional exemption, the worker must either primarily perform work that requires advanced knowledge in learning or science that is normally obtained through obtaining an advanced or professional degree. Examples of exempt professional workers can include certified public accountants, attorneys, doctors, and others.
Contact an experienced attorney at Swartz Swidler
If your employer has not paid overtime compensation that you believe you legally should have received, talk to your human resources department. If that does not resolve the issue, you should contact an experienced employment lawyer at Swartz Swidler. We can review your job duties and salary to determine whether you should have received overtime compensation. Contact us today by filling out our contact form or calling us at 856.685.1470.