FLSA

Can I Get Overtime Even Though I am Salaried?

Overtime and Salary

If you suspect that you are being denied some of your hard-earned wages, you should call or e-mail us today.  We have lawyers standing by.  You might be entitled to compensation - find out if you are.  All initial consultations are free.

Whether or not you are entitled to overtime depends almost entirely on what you do - not whether you are paid a salary or not.  Depending on your job function, you may or may not be exempt.  For more information on overtime exemptions, click here.   You are probably entitled to overtime (even if you receive a salary) if:

  • Your pay is reduced if there is no work; or
  • You receive less pay if you only work for part of a day; or
  • Your salary is docked because you missed a day (or more) of work.

If you are working a ton of hours for a salary, it is entirely possible that your employer is taking advantage of you by paying you a salary when you are entitled to overtime. Call us, get a consultation and make an informed decision.  You can be on the phone with an overtime lawyer today.

Why would my employer pay me a salary instead of hourly?

Employers often intentionally misclassify employees as salaried workers who are exempt from receiving overtime in order to save money. To be “exempt”, an employee must generally be an executive, administrative, or professional employee. Companies will try to fit employees into these categories even where overtime wage laws do not allow for it.

Some employers do not understand the difference between exempt and non-exempt employees.  These employers should talk to an overtime attorney to make sure they are following all applicable laws.

Call or email us today for a free consultation.  You can speak with a lawyer today.

Proposed Changes to FLSA Overtime Rules - Part II

The Duties Test

As we discussed in our last post, the most commonly used exemptions from the FLSA overtime pay requirements are for executive, administrative, and professional employees, and are often referred to as the “white collar” exemptions.  However, the FLSA does not define the terms “executive,” “administrative,” “professional,” or “outside salesman” and the regulations have generally required that each of the following three tests be satisfied for the exemption to apply: (1) the employee must be paid a predetermined and fixed salary that is not subject to reduction because of variations in the quality or quantity of work performed (the “salary basis test”); (2) the amount of salary paid must meet a minimum specified amount (the “salary level test”); and (3) the employee’s job duties must primarily involve executive, administrative, or professional duties as defined by the regulations (the “duties test”). 

Although the DOL did not propose any changes (in its June 30, 2015 FLSA amendment proposals) to the duties requirements it did seek comments as to whether the duties tests should be updated.  The following outlines the current duties test. 

Administrative Employees – In order for an administrative employee to be exempt, he or she must satisfy the “salary basis” and “salary level” tests described above and the duties test. A primary duty of the employee must include:

  • the performance of office or non-manual work directly related to the management or general business operations of the employer or the employer’s customers and
  • the exercise of discretion and independent judgment with respect to matters of significance.

Executive Employees – In order for an executive employee to be exempt, he or she must satisfy the “salary basis” and “salary level” tests described above and the duties test. A primary duty of the employee must include:

  •  management of the enterprise in which the employee is employed or manages a customarily recognized department or subdivision thereof,
  • customary and regular direction of the work of two or more other employee, and
  • the authority to hire or fire other employees or input (suggestions and recommendations) regarding the hiring, firing, advancement, promotion, or any other change of status of other employees that is given particular weight.

Professional Employees – In order for certain professional employee to be exempt, he or she must he or she must satisfy the “salary basis” and “salary level” tests described above and the duties test. A primary duty of the employee must include:

  • the performance of work requiring advanced knowledge, defined as work which is predominantly intellectual in character. Advanced knowledge must be in a field of science or learning, and such knowledge must be customarily acquired by a prolonged course of specialized intellectual instruction, or;
  • work that is original and creative in a recognized field of artistic endeavor, or;
  • teaching in a school system or educational institution, or;
  • work as a computer systems analyst, computer programmer, software engineer, or other similarly skilled worker in the computer field.

For each of the categories above, the employee must perform work that requires the consistent exercise of discretion and judgment or “requiring invention, imagination, or talent in a recognized field of artistic endeavor.”

Outside Sales Employees – In order for an outside sales employee to be exempt, he or she must satisfy the duties test.  The salary requirements do not apply. A primary duty of the employee must include:

  • making sales of tangible or intangible items such as goods, insurance, stocks, bonds, or real estate or obtaining orders or contracts for services or the use of facilities; and
  • Customary and regular work away from the employer’s place of business in performing the employee’s primary duty.

For more information on the current duties test and the FLSA exemptions for executive, administrative, professional and outside sales employees, please see the DOL’s Wage and Hour Division’s Fact Sheet (https://www.dol.gov/whd/overtime/fs17a_overview.htm).

Proposed Changes to FLSA Overtime Rules - Part I

On June 30, 2015, the United States Department of Labor (DOL) released proposed regulations that would amend various provisions of the Fair Labor Standards Act (FLSA).  In particular, the DOL proposed changes to the regulations governing the “white collar” exemption for executive, administrative, and professional employees.   The FLSA (and wage and hour laws, generally) are complicated but we will try to break down the key changes as simply as possible.

FLSA Overview

The FLSA generally requires employers to pay its employees at least the federal minimum wage plus overtime at a rate of at least 1.5 times the employee’s regular rate of pay for any hours worked over 40 in a week.  However, the FLSA provides for various exemptions from the overtime requirement.

The most commonly used exemptions are for executive, administrative, and professional employees, and are often referred to as the “white collar” exemptions.  However, the FLSA does not define the terms “executive,” “administrative,” “professional,” or “outside salesman” and the regulations have generally required that each of the following three tests be satisfied for the exemption to apply: (1) the employee must be paid a predetermined and fixed salary that is not subject to reduction because of variations in the quality or quantity of work performed (the “salary basis test”); (2) the amount of salary paid must meet a minimum specified amount (the “salary level test”); and (3) the employee’s job duties must primarily involve executive, administrative, or professional duties as defined by the regulations (the “duties test”). 

The regulations also exempt “highly compensated” employees who “customarily and regularly” perform one of the exempt duties of an administrative, executive or professional employee, but who do not otherwise meet the duties test.  Currently, and since 2004, an employee earning $100,000 in total annual compensation (with at least $455 paid weekly on a salary or fee basis) would be exempt from overtime as a highly compensated employee.

Salary Basis Test – NO CHANGE

There were no proposed changes to the first requirement that employees be paid on a predetermined and fixed salary that is not subject to reduction.

Salary Level Test – BIG CHANGES!

Currently, and since 2004, any employee earning less than $455 per week ($23,660 a year) is considered “nonexempt” and therefore entitled to overtime pay for hours worked over 40 in a week, regardless of whether the employee is paid on an hourly or salary basis.

Under the DOL’s proposal, the salary level required for an executive, administrative or professional employee to qualify for exemption from the FLSA minimum wage and overtime requirements would increase from $455 a week ($23,660 a year) to $921 a week ($47,892 a year), based on 2013 data.  This means that anyone who makes less than $47,892 a year will be entitled to overtime pay for hours worked beyond 40.

The proposed regulations also set forth mechanisms for annually updating the minimum salary and if one of the annual update mechanisms is implemented, the DOL anticipates that the annual salary requirement in 2016 will be $970 a week, or $50,440 a year.

Duties Test – STAY TUNED

The DOL did not propose any changes to the duties requirements but did seek comments as to whether the duties tests should be updated.  Please stay tuned for Part II of this series for an outline of the current duties test. 

Highly Compensated Employees - CHANGED

The DOL’sproposed regulations increase the required salary for “highly compensated employees” to $122,148, indexed to the annualized value of the 90th percentile of weekly earnings of full-time salaried workers.

The DOL’s proposed rule would effectively extend overtime protections to nearly 5 million white collar workers within the first year of its implementation.  Because the overtime regulations have not been updated in so long, employers have been able to classify more and more employees as exempt and therefore avoid paying overtime.  The overtime exception was originally meant to apply to highly-compensated executive, administrative, and professional employees although it now applies to workers earning as little as $23,660 a year. 

The DOL is expected to release its final rule later in 2016. 

I am being forced to work off the clock. What should I do?

In general, an employee’s “hours worked” include all time an employee must be on duty, or on the employer's premises or at any other prescribed place of work. All employees must be paid for all time worked. So if your employer is forcing you to work off the clock, you may be entitled to additional compensation (even if you are paid a salary).

Common examples of work off the clock:

  • Your employer asks to you set up, open a store or facility prior to clocking in.
  • Your employer makes you clock out for a meal break, but nonetheless makes you work during that period.
  • Your employer automatically deducts some period of time from your hours (usually for an assumed “break”), but does not compensate you for work you performed during that time.
  • Your employer asks you to clock out and then, after you are clocked out, perform additional work (e.g. cleaning up, shutting down, etc.).

Am I entitled to additional compensation:

Probably. This comes down to a determination of whether an employee is exempt or non-exempt. For further information that should help you determine whether or not you are exempt, these links may be helpful:

What to do if you are being forced to work off the clock:

  • Collect the facts – you need to get a sense of how much you are working off the clock, whether any additional employees are also working off the clock. Get any documents you have about off the clock work together.
  • Contact an employment lawyer – get a better understanding of your rights. We offer a free initial consultation. In most situations involving work off the clock we do not collect a fee unless we get recovery for our client.  Contact us today for a free consultation.

Q&A: NY Overtime Law | NY Overtime Pay

Do I have an overtime claim? If you think that you may have an overtime claim, chances are that you do.  Below are a few frequently asked questions about New York Overtime Law that can help you to determine whether you have an overtime claim or a claim under the Fair Labor Standards Act (“FLSA”) or NY Overtime Law Law.  If you think you are entitled to overtime, you should contact us for a free consultation.

Q: What do the terms overtime hours and overtime pay mean?

Overtime hours means the time an employee works more than 40 hours per work week.  Under federal law and the NY Overtime Law, overtime pay must equal at least one and one-half times an employee's regular rate of pay. So, if an employee regularly makes $10/hour, that employee is entitled to make $15/hour for all the overtime hours he or she works.

Q: Who must be paid overtime pay?

Most employees are entitled to overtime pay.  You are probably entitled to overtime pay unless your job is an "executive," "administrative," and "professional" positions.  Whether or not you fall into one of these categories depends on the specific nature of your job.  If you have questions about NY Overtime Law, you should talk to a lawyer.

Q: What if I have no written records or proof of the hours I worked?

You do not need written records or proof of the number of hours you worked. It is the employer's duty to maintain certain records regarding your work hours and pay.  If your employer does not have those records, your testimony under oath will be sufficient to prove your claim.

Q: Do I have to be paid overtime pay for working more than eight hours in one day?

No. Overtime pay must only be paid when you work more than 40 hours in week, and not more than eight hours in any one day.

Q: What if my employer tells me that I am an independent contractor?

You may still be entitled to overtime pay because your employer may be wrongly telling you that you are an independent contractor. Whether or not you are an independent contractor depends on a variety of factors that we will need to discuss with you before we can give you an answer.

Q: What if I work 30 hours in one week and 50 hours in the next week, can my employer average the two weeks to avoid paying me overtime?

No. This is a common method employers use to avoid paying overtime. The averaging of workweeks is expressly prohibited by law. You are entitled to receive overtime pay for each individual week you work more than 40 hours. In the above example, you are entitled to receive overtime pay for the 10 hours you worked more than 40 hours in week two.

Q: Is it legal that I am paid "comp time" instead of overtime?

Unless you work for the state or federal government, an employer providing compensatory or "comp time" instead of overtime pay is illegal.

Q: My employer tells me I am exempt from the overtime pay laws, am I?

Not necessarily. You are exempt based on your job duties and responsibilities and not based on what your employer calls you. It makes no difference if your employer calls you exempt or gives you a job title such as "manager" or "supervisor." It is a common practice for employers to give workers the title of "assistant manager" to avoid paying overtime when those employees are not exempt and should be paid overtime.

Q: Can I still be entitled to overtime pay if I am a salaried rather than hourly employee?

Yes. This is one of the common misconceptions about overtime pay. You are not exempt just because you are paid a weekly salary. If you are not otherwise exempt under the FLSA, your employer must convert your weekly salary to an hourly rate and pay you time and a half for all hours worked in excess of 40 hours.

Q: When should I file a claim against my employer?

The longer you wait the less overtime pay you may be able to recover. It is also best to promptly pursue your claim so that time records and witnesses are readily available.

Q: Can my employer fire me for bringing an overtime claim against it?

No. It is illegal for an employer to fire or in any way retaliate against an employee because he or she has filed a claim for overtime against the employer. We will help protect you if your employer tries to retaliate against you for filing an overtime claim.

Q: What should I do if I believe that I am owed overtime pay?

You should seek legal advice. The overtime laws are highly technical and we can help apply the law to your special situation. Our experienced NY Overtime Lawyers provide free consultations and will tell you if you are owed earned wages and if we can help you.

Q: How much does it cost to file a claim?

In most cases, all costs for overtime and unpaid wage cases will be advanced by our firm. Because our fee is typically contingent on a recovery from the employer, the firm does not get paid or reimbursed for expenses until the recovery is made.

Q: Do I have to pay attorneys fees to you if I lose my case?

No. We will only receive a fee if we are successful in resolving your claim.