Employees are entitled to earn overtime unless they are exempt from coverage under the federal Fair Labor Standards Act (FLSA) and their state's overtime law. If you fit into one of the exempt categories, you aren't eligible for overtime. However, it can be tough to figure out whether you are exempt or non-exempt.
Which Employers Have to Pay Overtime
Employers must pay overtime to non-exempt employees who work more than 40 hours in a week -- or, in a few states, more than eight hours in a day -- if they are covered by the FLSA or their state's overtime law. The FLSA applies to most employers. It covers businesses that have more than $500,000 in annual sales. Smaller businesses may also be covered if their employees work in interstate commerce -- that is, they do business between or among states. Congress has interpreted this term quite broadly, to include employees who make or receive phone calls to another state, send or receive mail from another state, or handle goods that have come from or will go to another state.
Even companies that are so local and small that they aren't covered by the FLSA might be covered by their state's overtime law.
Which Employees Are Eligible to Earn Overtime
Unless an employee fits into one of the exemptions from the FLSA (or state law), that employee is eligible to earn overtime. Employees who are eligible for overtime are referred to as non-exempt employees. Here is a list of the most common exemption categories; employees who don't fall into one of these categories are eligible to earn overtime:
- independent contractors
- employees of seasonal amusement or recreational businesses, such as ski resorts or county fairs
- employees of organized camps or religious or nonprofit educational conference centers that operate for fewer than seven months a year
- employees of certain small newspapers
- newspaper deliverers
- volunteer workers
- outside salespeople (that is, employees who customarily and regularly work away from the employer's business, selling or taking orders to sell goods and services)
- certain computer specialists who earn at least $27.63 per hour
- workers engaged in fishing operations
- seamen
- employees who work on small farms
- certain switchboard operators
- criminal investigators
- casual domestic baby sitters and people who provide companionship to those who are unable to care for themselves, and
- administrative, executive, and professional employees who are paid on a salary basis.
Administrative, Executive, and Professional Employees
The administrative, executive, and professional exemptions -- sometimes referred to as the "white collar" exemptions -- are among the most commonly used and misused. Many employers have been know to refer to regular rank and file employees as "assistant managers," in order to avoid paying them overtime. However, the job title doesn't matter to the Department of Labor: To fit into one of these exempt categories, an employee's actual day-to-day work duties must be relatively high level and require some discretion.
Also, these employees must be paid on a salary basis, which means they must earn at least $455 per week, and must be paid the same amount each week, without regard to hours worked or the quality or quantity of the work performed.
Under federal law:
- An administrative employee must perform office or other non-manual work that is directly related to the management or business operations of the employer or its customers, and must exercise discretion and independent judgment regarding significant issues.
- An executive employee's primary duty must be managing the employer's enterprise or a recognized division or department of that enterprise; the employee must regularly supervise at least two full-time employees (or the equivalent) and must have the authority to hire and fire or have significant input into hiring and firing decisions.
- A professional employee's primary duty must either be performing work that requires advanced knowledge in the field of science or learning, of a type that is usually attained through an advanced course of study; or performing work that requires invention, imagination, originality, or talent in a recognized creative or artistic field.
Get Legal Help
If you believe your employer has incorrectly characterized you as an exempt employee, you should consult with an employment lawyer. An experienced lawyer can assess the facts of your situation and help you figure out the best way to proceed. If your employer owes you overtime, a lawyer can help you file a claim with the federal or state labor department, or even help you file a lawsuit.
