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Overtime Compensation

What Is Overtime Compensation?

Overtime compensation, also known as overtime pay or simply overtime, refers to the increased pay rate that workers are awarded if they work more than a certain number of hours in a set period. In general, a worker will qualify for overtime compensation if they work more than 40 hours in a single week. 

The federal standard for overtime is described in the Fair Labor Standards Act (FLSA). All employers who fall under the jurisdiction of the FLSA must pay overtime to employees who work more than 40 hours in a single workweek. Under the FLSA, a workweek is defined as any 168-hour period that is made up of seven, consecutive 24-hour sections. An employer may start a workweek on any day at any hour and may have different workweek standards for different employees. Under federal law, there are no requirements for overtime to be paid out on weekends, holidays, or days of religious obligation.

The FLSA also defines what the overtime rate is. According to federal law, the rate of overtime compensation is 150% of an employee’s normal hourly rate. This means that if an employee earns the federal minimum wage of $7.25 per hour, they will make approximately $10.87 per hour when they earn overtime pay. This increased pay should be included with the employee’s standard pay on their next payday. While employees can only make up to 40 hours of standard pay, the FLSA does not put any limit on the number of overtime hours an employee may work.

Key Takeaways

  • Overtime compensation is a term that refers to the increased pay rate that employees are entitled to once they work a certain number of hours per day or per week.
  • Federal law requires employers to pay overtime to all workers who work more than 40 hours per week, but some states have daily limits that will also trigger overtime or overtime that triggers on certain days.
  • Employers who fail to properly compensate their employees by not paying them the overtime that they are owed may have committed a wage and hour violation.
  • If you have worked hours that qualify you for overtime but your employer has not paid you accordingly, an experienced Employment Law attorney may be able to improve the outcome of your case by utilizing experience and expert knowledge.

Overtime Compensation and Employment Law

Overtime compensation is one of the most important rights for employees. It serves as an incentive for workers to complete longer work weeks and can deter employers from forcing small groups of employees to work without rest or recovery.

While federal law applies a broad, 40-hour week limit before overtime begins, some states have expanded the circumstances that can trigger overtime pay. Four states, Alaska, California, Colorado, and Nevada, have overtime triggers that apply on a daily basis. This means that employees who work long shifts beyond a certain limit are qualified for overtime pay. In California daily overtime begins after the 8th hour an employee works. Furthermore, if an employee works more than 12 hours in one day in California they go from earning 150% of their normal pay rate to double their pay rate. 

In addition to daily overtime, some states also have a “seventh day” or “day of rest” overtime rule. Under this law, a worker in a state like Kentucky who works seven consecutive days earns overtime on the seventh day that they work. This allows workers to earn more income in exchange for working for a week straight. 

While overtime laws typically apply to hourly workers, who make money based on the number of hours they work in a week, salaried workers can sometimes qualify for overtime as well. In general, if an employer docks a salaried employee’s pay, whether for not meeting quotas, for taking unpaid time off, or for taking a sick day, then the employee may be argued to not be paid on a salary basis and instead may qualify for overtime.

If an employee qualifies for overtime compensation but does not receive the overtime rate, then their employer may be subject to investigation from the  Wage and Hour Division (WHD) of the U.S. Department of Labor. Suppose the WHD finds that the employer has failed to pay their employees for overtime that they performed. In that case, the WHD will compel the employer to return to compliance and the employees of the Department of Labor may sue the employer to recover the unpaid wages as well as any damages.

Bottom Line

If you have worked hours that qualify you for overtime but your employer has not paid you the overtime rate, you may be able to file a lawsuit to recover the wages that you are owed and the damages that you have suffered. In order to file and prevail in this lawsuit, you will need the help of an experienced Employment Law attorney.

An Employment Law attorney can zealously advocate on your behalf to get you the best possible outcome for your case. Your Employment Law attorney can use their legal expertise, trial tactics, and expert witnesses to gather and present evidence that demonstrates the hours that you worked, the laws that qualify you for overtime, and the failure of your employer to properly compensate you.

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