Should I get paid overtime?
Our Chicago-area/Illinois overtime lawyers are often asked whether employees are entitled to overtime. Overtime pay typically arises when an eligible employee works over 40 hours per week.
Our overtime employment lawyers regularly file overtime lawsuits on behalf of employees who are not properly paid overtime wages.
The New Overtime Rules:
The Department of Labor issued new rules concerning whether employees get overtime pay. Many employees and employers think that if someone is paid a salary, they do not have the right to overtime. That is often wrong. Even if employees gets a salary, they are often still entitled to overtime pay if they work more than 40 hours in a work-week. Here are some significant points from the new overtime rules that will help employers and employers figure out if they should be paid overtime:
- Employees paid less than $47,476 per year (or $913 per week) generally are entitled to overtime pay. Even if they are classified as exempt, or paid a salary, they generally should get overtime. This rule goes into effect on December 1, 2016. (The old floor provided only that employees earn more than $23,660). Notably, the amount will be updated every 3 years and, therefore, will increase in the future. The Department of Labor has reported that the threshold is expected to rise to more than $51,000 with the first update on January 1, 2020.
- Many, but certainly not all, employees who make between $47,476 and $134,004 are still entitled to overtime. Employees performing primarily executive, administrative, or professional duties are exempt from overtime pay. Often, an employer will claim that an employee is “exempt” and does not get overtime pay. Just because the employer claims an exemption does not mean they get one. For example, an “executive secretary” who makes over $50,000 per year might still be entitled to overtime pay even if he or she is classified as exempt. Whether an employee is really exempt depends on the nature of the work performed. Unfortunately, the new DOL guidelines were not very helpful in clarifying exempt vs. non-exempt employees and the impact on overtime. An overtime lawyer can help determine whether you are entitled to overtime pay by asking questions about your job duties.
- It is important to note that the employer asserting an exemption from overtime pay for an employee bears the burden of proof. See Idaho Sheet Metal Works, Inc. v. Wirtz, 383 U.S. 190, (1966). Exemptions are to be narrowly construed, Reich v. Wyoming, 993 F.2d 739, 741 (10th Cir.1993), with their application limited to employees who are “plainly and unmistakably within their terms and spirit.” Arnold v. Ben Kanowsky, Inc., 361 U.S. 388, 392 (1960); see also Martin v. Cooper Elec. Supply Co., 940 F.2d 896, 900 (3d Cir.1991).
It is expected that many employers will not keep abreast, or will chose to ignore, the new overtime rules. Doing so, however, is dangerous as it can result in substantial overtime liability (including double damages), wage lawsuits, and overtime interest. (Note: Under Illinois overtime laws, an employee gets interest on unpaid overtime at a rate of 2% per month and under federal law an employee can recovery double damages).
As such, many more employees are now entitled to get overtime pay under the new overtime rules. Consulting an overtime pay lawyer will help determine whether you get time and a half for over time work.
I am on a salary, should I get overtime pay? One frequent overtime myth is that just because someone gets a salary, they don’t get overtime. That is not always the case. Overtime pay is partially governed by the rules set forth in the Fair Labor Standards Act (“FLSA”). Whether an employee is eligible for overtime pay depends on whether the employee is classified as an “Exempt Employee” or a “Non-Exempt Employee” under the FLSA. Just because your employer says you are exempt does not mean that you in fact exempt. Generally, employees deemed exempt by the FLSA are those employees who are salaried and occupy a managerial position. For these employees, the job title the employee holds is not determinative of whether they are to be paid overtime under the FLSA. Rather, exempt employees often manage or direct employees and require advanced education. Thus, what determines whether an employee is exempt is the actual responsibilities the employee performs. For simplification purposes, exempt employees are typically classified as the following: executives, administrative, and professionals.
Are independent contracts entitled to overtime? Many independent contractors are misclassified to avoid paying them overtime. Under the law, even if your employer says you are an independent contract, you may still be entitled to overtime pay if you work over 40 hour per week.
Non-exempt employees are those individuals who work hourly and salary and are not specifically exempt from being paid overtime. That is, non-exempt employees often do not have managerial responsibilities. To qualify for overtime pay, non-exempt employees must work in excess of 40 hours in a 7-day workweek. For purposes of calculating the 40 hours worked, only hours actually worked may be included. That is, holiday pay or sick pay does not count towards the 40 hours. Furthermore, because a workweek is defined as a period of seven consecutive days, hours worked in excess of 8 hours on any single day may not require overtime pay if the employee has not worked 40 hours during the workweek.
In determining the amount due for overtime, the typical method of calculation is generally based on an employee’s regular pay rate. Each hour worked in excess of 40 hours must be paid at one and one-half rate of pay. For employees whose regular pay rate is less than the minimum wage, the legal minimum wage rate is substituted as the employee’s regular rate of pay.
Our Illinois employment law firm litigates wage, overtime and compensation disputes for employers and employees.