Understanding Hourly Wages and Overtime Laws

Overtime pay refers to extra cash compensation that employers give for hours that are in excess of the average 40 hour work week. The federal government requires that all employees are compensated for overtime hours, though often times municipal or state laws may be even more generous than the federal requirement.

What is the Current Overtime Pay?

Currently, the federal standard for overtime pay is at least 1.5 times the regular rate of pay. That means that in addition to a standard hourly wage, the employee would be paid an addition ½ of the wage per hour. So a $20 an hour job in overtime would pay about $30 an hour. Employers may decide to pay eligible employees by salary or some other method besides hourly; however, employers still must calculate overtime pay based on the actual overtime hours entered in. Overtime pay is due on regularly-scheduled paydays.

Overtime Eligibility Requirements

There are some eligibility requirements to consider. Not every worker will be eligible for overtime; some organizations hire employees that are exempt of the Fair Labor Standards Act’s requirements. This eligibility is not affected by a job title; rather it can vary according to occupations and job duties. For example some of the following occupations may be exempt from overtime: (Bear in mind each exempt occupation may carry very specific requirements as regard earnings and occupational duties)

Commissioned Sales Employees
Computer Professionals
Drivers, Driver Assistants, Mechanics and Loaders
Farm Workers
Auto Salesmen
Seasonal Recreational Businesses (amusement parks, national parks, forests)
Executive, Administrative and Outside Sales
Airline Employees or Salespeople
Casual Babysitters
Boat Salespeople
Companions for the Elderly
Workers With Disabilities
Federal Criminal Investigators
Fishing
Livestock Auction Workers
Local Delivery Drivers
Motion Picture Theater Employees
Newspaper Delivery
Vessel Seamen
Switchboard Operators
Taxicab Drivers
Youths Employed by their Parents

There are other occupations that may not be eligible for overtime payment. Bear in mind that some employers have the right to classify their workers as partially exempt from overtime pay or may be protected as in some of the occupations cited above. However, not just any company can label employees as exempt just to avoid paying overtime.

Federal Wage and Overtime Enforcement

There is an entire federal division devoted to hourly wages and overtime and it is called the U.S. Department of Labor, Wage and Hour Division. Not only does this organization oversee employees for privately owned businesses but also for state and local government agencies.

Overtime does not apply in instances where work is scheduled past a reasonable work schedule, such as on weekends or late at night; only schedules that actually exceed 40 hours in one workweek. Standby duty does not ordinarily count as work overtime, since the worker is not literally working every moment of the day. However, the exemption may be lifted if the worker has specific instructions to not use this standby time for any personal endeavors.

For more information on overtime eligibility and technicalities you should be aware of, or if you feel you are not being paid fairly, consult with an employment lawyer near you to discuss your options.

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