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Overtime: How Much?

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While the information provided in this webinar is intended to be accurate, it should not be considered legal advice. The Legal Center cannot be held responsible for any errors or omissions.

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Fair Labor Standards ActFair Labor Standards Act

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FLSA

• Regulates hours of work• Sets minimum wage requirements• Establishes overtime pay requirements

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FLSA

WHY DO WE CARE?

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FLSA

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State of the Nation

• 70% of employers are out of compliance • Wage and hour claims have tripled• FLSA actions outnumber discrimination

claims• Wage and hour litigation rose 64% in 2006

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ItIt’’s a new day . . . s a new day . . .

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and there’s a “new sheriff in town ”

Secretary of Labor Hilda Solis, speaking to AFL-CIO gathering and later pledging to hire an additional 250 investigators.

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Quiz Time

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True or False

A manager who engages in misconduct can be personally liable under federal wage and hour laws?

1. True2. False3. Unsure

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The Answer is True.

Under federal law a manager who has sufficient control over employees ’ working conditions (hiring, firing and demotions) can be held personally liable for wage and hour violations.

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FLSA Penalties

• Employee can sue • Employee can file complaint with DOL• Civil or criminal liability• Personal liability

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Getting it Wrong

• Up to 3 years of back pay

• Double damages• Interest• Fines• Attorneys’ fees

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Wage & Hour Risks

• Misclassifying employees

• Not paying employees correctly for work time

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Exempt v. Non-Exempt

Exceptions to minimum wage and overtime requirements: – Executive – Administrative– Professional– Highly Compensated– Outside Sales– Computer Professional

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Getting it Wrong

• Employer’s burden to prove exemption

• Recent settlements

– Starbucks $18 million

– Taco Bell $9 million

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Exempt v. Non-Exempt

Non-exempt employees mustcomplete time sheets that accuratelyspecify time in and out each day and lunch periods

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Doing the Math: Paying Employees Correctly

Covered, non-exempt employees must receive one and one-half times the regular rate of pay for all hours worked over 40 in a 7-day workweek

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No Overtime Waivers

An employee may not waive his or her right to overtime pay

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Four Steps to Overtime Calculations

1. Determine employee’s workweek

2. Determine hours worked

3. Determine employee’s regular rate of pay

4. Calculate overtime

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State Laws

• Follow the law that provides for the higher rate of pay

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Step 1: Determine the Employee’s Workweek

• Compliance is determined by workweek, and each workweek stands by itself

• Workweek is 7 consecutive 24-hour periods (168 hours)

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Step 2: Determine Hours Worked

Work not requested but “suffered” or “permitted” is work time.

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Paid Work Includes

• E-mails• Phone calls• Travel time• Training time• Meal and rest periods

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Quiz Time

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True or False

Employees must be paid overtime for all work during nights and weekends?

1. True2. False3. Unsure

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The Answer is False.

As long as an employee does not work more than 40 hours in a given week, federal law does not regulate when those hours can occur (but state law might!).

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Paid On-Call Time

• Employee has to stay on the employer’s premises

• Employee has to stay so close to the employer’s premises that the employee cannot use that time effectively for his or her own purposes

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Travel Time

• Ordinary home to work travel is not work time

• Travel between job sites during the work day is work time

• Special rules apply to travel away from the employee’s home community

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Training Time

Time employees spend in meetings, lectures, or training is generally considered hours worked and must be paid.

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Quiz Time

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Quiz Time

Jennifer and Angelina, are both non-exempt employees. They ride together on Friday afternoon from Washington, D.C. to attend training on Saturday in Richmond, VA. Jennifer drives and Angelina sleeps. They leave at 4:00 p.m. reaching Richmond at 6:30. Jennifer and Angelina generally work 8:00-4:00 p.m. Monday to Friday.

Must Jennifer be compensated for the drive time?

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Quiz Time

On Saturday after the six-hour training class concludes the women leave at 3:00 p.m. Angelina drives, reaching home at 6:30 p.m.

Who gets compensated (and for how long) on Saturday?

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Meal and Rest Periods

• FLSA does not require meal or rest periods (but state law might!)

• Employees must be paid for all breaks of less than 30 minutes

• Unpaid breaks must be at least 30 minutes of uninterrupted time

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Step 3: Determine Regular Rate of Pay

Payment on an hourly basis = regular rate is the same as the employee’s hourly rate of pay

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Regular Rate of Pay

• Payment at different hourly rates = the general rule for regular rate is averaging out payment at each rate by the amount of hours worked at each rate

• 20 hours at $10 and 20 hours at $15 regular rate would be [(20 x $10) +(20 x $15)] / 40 = $12.50 an hour

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Step 4: Calculate Overtime Pay

Rate of pay for Bob, a non-exempt employee, is $10 per hour or $400 per workweek.

Bob’s OT rate is 1.5 x regular rate of pay = $15/hour overtime

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Calculate Overtime Pay

Assume Bob works 45 hours in week 1 and 50 hours in week 2.

Week 1:Regular pay of $400 ($10 x 40 hrs.)Overtime pay of $75 ($15 x 5 hrs.)

Week 2:Regular pay of $400 ($10 x 40 hrs.)Overtime pay of $150 ($15 x 10 hrs.)

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Different Hourly RatesJanitor Rate $8.50 Janitor Hours 21Cook Rate $9.00 Cook Hours 26

21 hours x $8.50 = $178.5026 hours x $9.00 = $234.00

$412.50

$412.50 / 47 hours = $8.78 (Regular Rate)$8.78 x 0.5 = $4.39$4.39 x 7 hours = $30.73(Overtime Due)

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Avoid a Ticking Time Bomb

• Train employees & managers

• Conduct an Audit– Ensure all jobs are

classified correctly

• Investigate complaints promptly

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Help is Available!

• NFIB Employment Law Hotline provides NFIB members FREE legal advice.

Call (866) 678-NFIB.

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Help is Available!

• NFIB Guide to Wage and Hour Laws

• Available FREE to NFIB members at www.nfib.com/legal

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Additional Information

• Visit the WHD homepage at: www.wagehour.dol.gov

• Call the WHD toll-free information and helpline at 1-866-4US-WAGE (1-866-487-9243)

• Use the DOL interactive advisor system - ELAWS: www.dol.gov/elaws

• Call or visit the nearest Wage and Hour Division Office

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Thank you!Contact us at: legalcenter@nfib.org