Overtime Pay, What Are Your Rights?

If you are frequently asked to work overtime, it helps to know what your rights are regarding pay. Some companies cheekily try to get away without paying extra at all. Therefore, by understanding your rights you will be in a much better position to fight for what you are owed.

What classes as overtime?

The first thing you need to know is what exactly classes as overtime. According to the Labor Standards Act (FLSA), overtime is classed as any hours worked over 40 hours a week. However, there are some employees who will be exempt from this. There isn’t currently any maximum limit set on how many hours employees over the age of 16 can work. It is also worth noting that holidays, weekends and days of rest do not entitle you to additional pay for overtime. It only applies if those days account for over 40 hours in the entire week.

If you are classed as a white collar worker, you will also need to be aware of the Presidential Memorandum that was signed by President Obama in March 2014. This called for an update to the regulations which defined which white collar workers were eligible to get paid for overtime.

How much are you entitled to?

The FLSA states that non-exempt employees are entitled to 1.5x their standard hourly rate when working overtime hours. This means if you typically earn $20 per hour, the minimum your employer can pay you for any overtime hours is $30 per hour. There is no maximum limit so you will find some employers who pay more than the minimum requirement.

All overtime pay you earn in the working week should be paid on your next standard payday.

Am I eligible?

While the majority of employees are eligible for paid overtime, it is estimated that around 50 million American workers are exempt from the rule. PayWizard provides more information on those who are exempt which you should look at before taking action.

If you are eligible for paid overtime, you are protected by law. You will need to check out the laws applicable in the state you live.

Understanding the rules for tipped workers

If you work in a tipped based job, the amount you are paid should never be less than the current $7.25 minimum wage rate. This typically breaks down at $2.13 set wage and $5.12 tip credits per hour. When working out overtime rates, you should always add the minimum wage rate of $7.25 x1.5. This would equal $10.88 per hour including tips.

Each state has its own tip credit laws that you will need to be familiar with. They tend to be a lot stricter than the general FLSA regulations.

If you are entitled to overtime pay and you haven’t been paid it, you can take legal action. Never accept less than you are worth. If you are working more than 40 hours a week, it is only fair to be paid for the extra time you put in. 

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