exemptions to overtime

Am I Entitled to Overtime if I am on Salary?

Maybe.

Just because your employer pays you a salary does not necessarily mean you are ineligible for overtime.  In other words, you may be entitled to receive overtime even if your employer tells you that you are not.

Whether or not an employee is entitled to overtime depends on the following factors:

  • First, you must make at least $455 per week. 
  • Next, you must be treated like a salaried employee – you cannot get docked for working less in a given week.  You must get paid the same every week, no matter what.
  • Finally, there is the nature of the work you do.  The more responsibility (and less supervision) you have, the more likely it is that you are not entitled to overtime.  And vice versa.

Confused?  Curious?  Just want to chat?  Contact us.  An employment lawyer is standing by to speak to you right now.

Can you get overtime if paid salary?

Are you entitled to overtime if paid salary?  Maybe.

How you are paid does not impact whether or not you are entitled to overtime.  This is true regardless of whether you are paid by the hour, by the day or by the week.  It also holds true if you are paid an annual salary. What matters is what you do, not how you are paid.  Whether or not you are exempt from federal and state overtime laws depends almost entirely on the nature of your work.

A common trick used by unscrupulous employers is to pay an otherwise non-exempt (i.e. entitled to overtime) employee a "salary" so that the employee - erroneously - believes that he/she is not entitled to overtime.  The employer's decision to pay a salary does not change the employer's obligation to pay certain employees time and a half for hours over forty in a week.  Another misconception is that if someone has a "manager" or "supervisor" title that they are not entitled to overtime.  Titles do not matter - only what you do matters.

While how an employee is paid (salary versus hourly) may impact the calculation of damages (i.e. how much you could win in a lawsuit), it will not impact liability (i.e. whether the employee is entitled to overtime compensation to begin with).

If you believe that you have been denied overtime, or if you have questions about overtime if paid salary, you should contact us today.  Consultations are free - you have nothing to lose.

For more information:

Overtime Law Basics - Debunking Overtime Myths

Q&A - NY Overtime Law

 

 

 

Am I Entitled to Overtime?

Most employees are entitled to overtime if they work over 40 hours/week.  Just because you are paid a salary does not mean that you cannot get overtime.  Nor can your company offer you “comp time” instead of paying you.  If you are entitled to overtime, you must be paid time and a half for any week you work over 40 hours. You are not entitled to overtime if:

You are an executive: This means your weekly salary is at least $455, and your primary job duty is managing the company or a department/subdivision.  You must also to supervise at least two full-time employees, and have the authority to hire/fire them, or at least make recommendations on hiring/firing.

You are an Administrator: This means your weekly salary is at least $455, and your primary job duty is office or non-manual work directly related to management or business operations.  Your job must involve using discretion and independent judgment regarding matters of significance.

You are a “Learned Professional”: This means your weekly salary is at least $455, and your primary job duty is performing work requiring advanced knowledge, predominantly intellectual, and the consistent exercise of discretion and judgment. For example, doctors, and registered nurses are learned professionals.

You are a “Creative Professional”:   This means your weekly salary is at least $455, and your primary job duty is requires invention, imagination, originality or artistic talent.

You are a “Computer Employee”: This means your weekly salary is at least $455 you are a computer systems analyst, computer programmer, software engineer or other similarly skilled worker in the computer field.  Your primary job duty must be applying systems analysis techniques and procedures, including consulting with users, to determine hardware, software or system functional specifications; or design, development, documentation, analysis, creation, testing or modification of computer systems or programs, including prototypes, based on and related to user or system design specifications; or design, documentation, testing, creation or modification of computer programs related to machine operating systems; or a combination of these.

You are an outside sales professional:   This exemption applies where the primary job duty is making sales, obtaining orders or contracts for services or use of facilities and you regularly work away from the company’s place of business.

You are a highly-compensated employee: People who make over $100,000 a year are generally exempt from overtime.

You are a motor carrier: Drivers, driver’s helpers and mechanics (as well as others involved in vehicle safety or a motor vehicle used as transportation, the FLSA does not apply to you and the relevant law is the Federal Motor Carrier Act.

These are some of the main exemptions but there are many more.

If you think that you have been denied overtime, please contact us.  At attorney from our firm will get back to you within 24 hours.

NY Overtime Lawyers

NY Overtime Lawyers New York Overtime rules provide that you are entitled to overtime in New York for any amount of time worked over 40 hours.  Specifically, you are entitled to 1.5x your hourly rate for any overtime in excess of 40 hours.  If you have been denied overtime in New York, you may be entitled to additional damages beyond the wages that are already owed to you. New York Overtime Rules also provide for numerous exemptions.  For example, administrators, executives and professionals earning a minimum of $455 per week are exempt and not entitled to overtime.  But often, employers misclassify employees and tell them that they are exempt from overtime when they are not. Our NY Overtime Lawyers can help.

New York Overtime Rules are very complicated.  If you have not been paid overtime for any reason, please contact a NY Overtime Lawyer at our firm for a free initial consultation.  Know your rights!

NY Overtime Pay | How to Calculate Overtime Pay

How do I calculate Overtime Pay? Just because your boss tells you that you are not entitled to overtime does not make it true.  Countless people are misled into believing that they are not entitled to overtime.  To determine how much you might be owed, calculate as follows:

If you are an hourly employee:

●         Multiply your hourly rate by 1.5.  If you normally make $20 for every hour worked, multiply this by 1.5 to get to $30 per hour of overtime.

●         Multiply your total number of hours over 40 in a week by your overtime rate.  If you worked 45 hours, you are owed 5 overtime hours of overtime at $30 per hour of overtime, your company owes you $150 for overtime pay.

If you are a salaried employee:

●         Determine your weekly salary.

●         Determine your overtime premium rate.  To determine your overtime premium rate first, calculate your regular hourly rate by dividing your weekly salary by the number of hours worked that week.  Divide this number by two for your overtime premium rate.

●         If you are entitled to overtime, the company owes you your weekly hours over 40 times your overtime premium rate.

 

If you believe that you have been denied overtime pay as a NY or NJ employee, please contact us.

FLSA Basics

I.          Misclassification as Exempt Under the federal Fair Labor Standards Act ("FLSA") some employees are exempt from receiving (or are not entitled to) overtime pay.

However, unless you qualify for one of the overtime exemptions, it is likely your employer should be paying you one-and-one half times your regular rate of pay for any hours you work in excess of forty hours per work week.  If you work more than forty hours per work week but do not receive overtime pay, and you do not qualify for any of the following exemptions, you may be misclassified and could be entitled to up to three years of unpaid overtime.

A.        Executive Exemption

In order to qualify for the FLSA's executive exemption, the following four tests must be met:

  • You must be compensated on a salary basis at a rate not less than $455 per week;
  • Your primary duty must be managing the enterprise, or managing a customarily recognized department or subdivision of the enterprise;
  • You must customarily and regularly direct the work of at least two or more full-time employees or their equivalent; and
  • You must have authority to hire or fire other employees, or your suggestions and recommendations as to hiring, firing, advancement, promotion or any other change of status of other employees must be given particular weight.

If your employer has classified you as exempt from the FLSA's overtime requirement under the executive exemption, but you do not meet all four tests above, you may be misclassified and could be entitled to up to three years of unpaid overtime.

B.        Administrative Exemption

In order to qualify for the FLSA's administrative exemption, the following three tests must be met:

  • You must be compensated on a salary basis at a rate not less than $455 per week;
  • Your primary duty must be the performance of office or non-manual work directly related to the management or general business operations of your employer or your employer's customers; and
  • Your primary duty must include the exercise of discretion and independent judgment with respect to matters of significance.

If your employer has classified you as exempt from the FLSA's overtime requirement under the administrative exemption, but you do not meet all three tests above, you may be misclassified and could be entitled to up to three years of unpaid overtime.

C.        Professional Exemption

There are two types of professional exemptions under the FLSA: (1) the learned professional exemption; and (2) the creative professional exemption.

In order to qualify for the FLSA's learned professional exemption, the following four tests must be met:

  • You must be compensated on a salary basis at a rate not less than $455 per week;
  • Your primary duty must be the performance of work requiring advanced knowledge, defined as work which is predominately intellectual in character and which includes work requiring the consistent exercise of discretion and judgment;
  • The advanced knowledge, discussed under number 2, must be in a field of science or learning; and
  • The advanced knowledge must be customarily acquired by a prolonged course of specialized intellectual instruction.

If your employer has classified you as exempt from the FLSA's overtime requirement under the learned professional exemption, but you do not meet all four tests above, you may be misclassified and could be entitled to up to three years of unpaid overtime.

In order to qualify for the FLSA's creative professional exemption, the following two tests must be met:

  • You must be compensated on a salary basis at a rate not less than $455 per week; and
  • Your primary duty must be the performance of work requiring invention, imagination, originality or talent in a recognized field of artistic or creative endeavor.

If your employer has classified you as exempt from the FLSA's overtime requirement under the creative professional exemption, but you do not meet both tests above, you may be misclassified and could be entitled to up to three years of unpaid overtime.

D.        Highly Compensated Employees

If you perform office or non-manual work and you are paid a total annual compensation of $100,000 or more, which must include at least $455 per week, you are most likely exempt from the FLSA's overtime requirement if you customarily and regularly perform at least one of the duties of an exempt executive, administrative or professional employee, discussed above.

E.        Computer Related Exemption

In order to qualify for the FLSA's computer related exemption, the following three tests must be met:

  • You must be compensated on a salary basis at a rate not less than $455 per week or be compensated on an hourly basis at a rate not less than $27.63 an hour;
  • You must be employed as a computer system analyst, computer programmer, software engineer, or other similarly skilled worker in the computer field; and
  • Your primary duty must consist of at least one of the following: (1) the application of systems analysis techniques and procedures, including consulting with users, to determine hardware, software or system functional specifications; (2) the design, development, documentation, analysis, creation, testing or modification of computer systems or programs, including prototypes, based on and related to user or system design specifications; (3) the design, documentation, testing, creation or modification of computer programs related to machine operating systems; or (4) a combination of the aforementioned duties.

If your employer has classified you as exempt from the FLSA's overtime requirement under a computer related exemption, but you do not meet all three tests above, you may be misclassified and could be entitled to up to three years of unpaid overtime.

Note: the FLSA's computer employee exemption does not include employees engaged in the manufacture or repair of computer hardware and related equipment.  If you are engaged in either of these activities, and you do not otherwise qualify for a different FLSA exemption, your employer most likely must pay you overtime.

F.         Outside Sales Exemption

In order to qualify for the FLSA's outside sales exemption, the following two tests must be met:

  • Your primary duty must be making sales or obtaining orders or contracts for services.
  • You must be customarily and regularly engaged away from your employer's place of business.

Unlike many other FLSA exemptions, you need not be paid a certain amount per week to qualify for the outside sales exemption.

If your employer has classified you as exempt from the FLSA's overtime requirement under the outside sales exemption, but you do not meet both tests above, you may be misclassified and could be entitled to up to three years of unpaid overtime.

G.        Retail or Service Establishment Exemption

In order to qualify for the FLSA's retail or service establishment exemption, the following three tests must be met:

  • You must be employed by a retail or service establishment.  Retail and service establishments are defined as establishments 75% of whose annual dollar volume of sales of goods and/or services is not for resale and is recognized as retail sales or services in a particular industry;
  • More than half of your total earnings must represent commissions; and
  • Your total compensation divided by the number of hours you work or your regular hourly rate must be greater than one and one-half times (150%) the federal minimum wage.

If your employer has classified you as exempt from the FLSA's overtime requirement under the retail or service establishment exemption, but you do not meet all three tests above, you may be misclassified and could be entitled to up to three years of unpaid overtime.

H.        Other FLSA Exemptions

Although this list is not conclusive, if you qualify for any of the following less common FLSA exemptions, you may not be eligible to receive overtime pay:

  • You are employed by a seasonal amusement or recreational establishment.
  • You are engaged in fishing operations.
  • You deliver newspapers.
  • You are a farm worker employed on a small farm.
  • You are a casual babysitter.
  • You are an auto, truck, trailer, farm implement, boat, or aircraft salesperson employed by a non-manufacturing establishment that is primarily engaged in selling those items to ultimate purchasers.
  • You are employed by a railroad or air carrier.
  • You are a taxi driver.
  • You are a domestic service worker and you reside at your employer's residence.

II.          Preliminary and Postliminary Activities

Preliminary activities are activities which you perform before you begin your "principal" work activities.  Postliminary activities are activities which you perform after you end your "principal" work activities.  Principal activities are activities which you are employed to perform and also include all activities which are an integral (or essential) part of your employer's business.  Your employer must pay you for time spent engaged in principal, integral and essential activities.  Depending on the circumstances, time you spend in preliminary and postliminary activities may also be compensable.

Time you spend in the following preliminary and postliminary activities is not generally compensable:

  • Walking, riding, or traveling to and from the actual place where you perform the principal activities which you are employed to perform.
  • Activities that you perform either prior to or after the time that you end your principal activities.

There are two exceptions in which preliminary and/or postliminary activities are compensable:

  • Such time is considered hours worked pursuant to an express provision of a written or unwritten contract between you and your employer.
  • Such time is treated as hours worked according to custom or practice at the place where the work is performed.

III.          Calculating Overtime Pay

Under the Fair Labor Standards Act ("FLSA"), overtime compensation generally must be paid to covered employees (employees who do not qualify for an FLSA exemption) at a rate of at least one and one-half times their regular rate of pay for each hour worked in excess of 40 hours per workweek.  In addition, a covered employee's regular rate of pay must be equal to or greater than the federal minimum wage.  In most circumstances, overtime pay earned in a particular workweek must be paid on the regular pay day for the pay period in which the overtime wages were earned.

Based on your employer's discretion, your workweek may begin on any day of the week and at any hour of the day.  However, your workweek must be a fixed and regularly recurring period of seven consecutive 24-hour periods.  Therefore, your employer cannot average your hours worked over two or more weeks to determine you hours worked per workweek.

In addition, under the FLSA, your employer is supposed to maintain records of the time you spend performing compensable work activities.  If you bring an overtime claim against your employer, but your employer has failed to maintain the required records, you are entitled to recover overtime compensation based on a good faith (reasonable and realistic) estimate of the time you worked over the past 2 to 3 years for your employer.

A.        Employees Paid by the Hour

If you are paid by the hour, your employer must pay you at least one and one-half times your regular hourly rate for each hour worked over forty hours per workweek.

B.        Employees Paid on a Piecework Basis

If you are paid on a piecework basis, your regular rate of pay is obtained by dividing your total weekly earnings by the total number of hours you work in a particular workweek.  You are entitled to an additional one-half times your regular rate of pay for each hour you work over forty hours per workweek, plus full piecework earnings.

C.        Employees Paid a Salary for a Regular or Specified Number of Hours

If you are paid a salary for a regular or specified number of hours per workweek, your regular rate of pay is obtained by dividing your salary by the number of hours your salary is intended to compensate.  You are entitled to an additional one-half times your regular rate of pay for each hour you work over 40 per workweek, plus your salary.

D.        Employees Paid a Salary on Other than on a Weekly Basis

If you are paid a salary on other than on a weekly basis, your weekly pay must be determined in order to compute your regular rate of overtime pay.  If your salary is intended to cover a half-month, it must be multiplied by 24 and the product divided by 52.  If your salary is intended to cover an entire month, it must be multiplied by 12 and the product divided by 52.

E.        Weekend and Holiday Work

Under the FLSA, you are not entitled to an overtime premium solely because you perform work on a weekend or holiday.

F.         Overtime Pay May Not be Waived

The FLSA's overtime requirement cannot be waived by agreement between you and your employer.  In addition, an announcement by your employer that no overtime work will be permitted, or that overtime work will not be paid unless it is authorized in advance, will not impair your right to compensation for compensable overtime hours worked.

 

Learn your rights.  Contact us for a free initial consultation.  An attorney from our firm will get back to you within 24 hours.

Recent Supreme Court Case - Pharmaceutical Sales Reps Exempt from FLSA Minimum Wage and Overtime

On June 18, 2012, the United States Supreme Court resolved a split between circuit courts and held that pharmaceutical sales reps engage in “sales” and therefore are exempt under the Fair Labor Standards Act (FLSA). Under the FLSA, “outside salespersons” are exempt from minimum wage and overtime.  The issue for the Supreme Court was whether pharmaceutical reps “sell” drugs to doctors or whether they merely obtain a promise from the doctor to prescribe their employer’s pharmaceutical products.

Plaintiffs argued that because the pharmaceutical rep makes no actual “sales” he/she should not be considered a salesperson.  Plaintiff argued that these reps should be treated as “promoters” and should therefore be entitled to minimum wage and overtime payments.The Department of Labor filed an amicus brief on behalf of the Plaintiffs and took the position that pharmaceutical reps were non-exempt because “[a]n employee does not make a ‘sale’ for purposes of the ‘outside salesman’ exemption unless he actually transfers title to the property at issue.”

The Supreme Court refused to accept the DOL’s interpretation reasoning that such an interpretation would remove from the exemption many sales persons who previously were exempt, and that it was much narrower than regulations and prior case law.

The decision was 5-4.  The dissent agreed that the DOL’s interpretation was not worth much thought that the duties performed by pharmaceutical reps do not amount to "sales" but are promotion activities and are therefore non-exempt.

The case is Christopher v. Smithkline Beecham:  http://www.supremecourt.gov/opinions/11pdf/11-204.pdf

Please contact us if you have any questions about minimum wage or overtime pay.