The Fair Labor Standards Act requires employees to be paid overtime. In most cases, employees are paid time-and-one-half their regular pay rate for each hour worked over 40 per week. Many workers, however, are "exempt" from overtime laws and do not have to be paid. Executive, administrative and professional employees are generally exempt from overtime.
In recent years, there has been a rise in litigation over unpaid overtime. Several nationwide companies, including Wal-Mart, Radio Shack, Starbucks, Taco Bell, and Computer Sciences Corporation, have faced lawsuits in recent years over wage discrepancies.
Most disagreements in court center on who is labeled exempt from overtime. Because government descriptions of job duties haven't changed since 1949, determining who falls under this category can be difficult. Bona fide executives and some categories of computer, agricultural and recreational workers are usually exempt while non-supervisory factory or office workers are usually not exempt. Salaried workers are also not always exempt. Employers usually neglect to pay overtime because they assume the employee is exempt. However, the Department of Labor or the court is responsible for making this decision.
Often, the employer may attempt to cheat an employee out of overtime benefits in an effort to save money. For example, in 2002, a federal jury found Wal-Mart guilty of forcing employees in Oregon to work unpaid overtime. According to the suit, managers assigned more work than could be completed in a single day, forcing employees to remain on the job after clocking out. Workers were allegedly reprimanded when they asked for overtime pay.
On August 23, 2004 the Department of Labor instituted new overtime rules in an effort to update the Fair Labor Standards Act. The new rule expands the number of workers eligible for overtime by nearly tripling the salary threshold. Under the previous 50-year-old regulations, only workers earning less than $8,060 annually or $155 per week were guaranteed overtime. Under the new rule, workers paid less than $23,660 or $455 per week are now automatically guaranteed overtime regardless of their titles or duties. An estimated 1.3 million workers are expected to gain overtime eligibility. Under the new rules, thousands of salaried white-collar workers earning $100,000 or more a year may lose overtime pay. White-collar workers who fall between those salary levels will receive overtime based on their job duties and experience. Employers are told to make decisions on a case-by-case basis.
Labor unions and many employer groups argue that the new regulations will adversely affect 6 million workers. Critics say employers will simply raise salaries above the $23,660 mark to avoid having to pay overtime. There is little agreement between the Bush Administration and interest groups as to how many employees will gain or lose income as a result of the new regulations. Labor lawyers say the changes may lead to a rise in litigation.
If you feel you are owed compensation for overtime work, it may be important to contact an attorney
who can help you protect your legal rights. Please keep in mind that there may be time limits
within which you must commence suit.
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