Withholding Overtime Pay

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What Are the Requirements for Overtime Pay?

Rules governing overtime pay are mostly covered in the Fair Labor Standards Act (FLSA). According to FLSA, employers must pay their employees overtime wages when they work over 40 hours in one week. Overtime wages can also be specified in an employment contract, so long as they conform to the minimum FLSA standards.   

Also, under the act, employers must pay an overtime wage of 1 ½ times the amount of the employee’s hourly wage rate. So, if the employer is paid at a rate of $10/hour, they are entitled to be paid at 1 ½ times that rate. This amounts to $15/hour for every hour after they have completed 40 hours in one week. If, during the following week they work less than 40 hours, then they will not be entitled to overtime pay for that week.   

What Are Overtime Exemptions?

The Fair Labor Standards Act contains many exemptions for certain employees who work in specified areas of commerce. This means that employers in these fields are exempt, or not required to pay overtime to their employees. Some commonly exempted jobs include certain retail positions, many jobs related to farming and agriculture, and certain sales positions. Check with an attorney to determine if you are exempt from FLSA overtime requirements.

What Is Considered a Violation of Overtime Wage Requirements?

In order to prove that an employer violated overtime rules, the employer must prove: 1) An employer-employee relationship actually existed; 2) they are not exempt from FLSA; and 3) the employer did in fact violated statutory rules.

Violations of overtime requirements can include:

Employees can also violate overtime rules. For example, a common occurrence is when an employee falsifies their time sheets in order to collect overtime pay. 

What Remedies Are Available for a Violation of Overtime Rules?

As a remedy, employees can usually obtain back pay if they are entitled to overtime pay but did not receive it as a result of an employer violation. Employees usually cannot immediately file a lawsuit against their employer. First, the employee will be required to file their claim with an administrative agency such as the Equal Employment Opportunity Commission (EEOC). 

The agency will then launch an investigation into the incident and determine what the appropriate remedy is. In addition to back pay, the employer may also be required to adjust their policies according to overtime standards. Employees can only file a lawsuit if the agency’s remedy has been determined to be unsatisfactory.

Employees usually have a two-year time period (statute of limitations) in which to file their claim. If the employer has willfully withheld overtime pay, the statute of limitations for filing is extended to three years. After the statute of limitations has expired, the employee can no longer file a claim.

Are There Any Defenses to Overtime Violations?

The most commonly used defense is that the employee is exempt from overtime pay requirements under FLSA rules. Even if the employee is expecting overtime pay, they cannot collect overtime wages if they are subject to the FLSA exemption.

Some jurisdictions allow employers to claim a “good faith” defense. This means that in good faith, the employer honestly believed that the employee was only entitled to regular hourly wages. Courts will use a variety of factors to determine whether the employer was acting in good faith. The good faith defense is not available in all situations. 

Do I Need a Lawyer for Overtime Wage Disputes?

If you feel that you have been denied your rights regarding overtime pay, it is important that you contact an employment lawyer. Overtime pay is a crucial part of maintaining a healthy work environment, and such issues require the advice of an attorney. Working with an attorney can be of great help when preparing your claim. 

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Last Modified: 08-20-2014 12:02 PM PDT

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