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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). Generally, the FLSA requires employers to pay their employees overtime wages if they exceed 40 hours in any given work week.
Employers have the power to determine the overtime wage rate provided it is at least 1 ½ times the worker's normal salary. For example, an employee earning $10 per hour would have to receive at least $15 per hour after working 40 hours in a workweek.

What are Overtime Exemptions?

The Fair Labor Standards Act contains many exemptions for employees in certain industries. Exempt employees under the FLSA are generally not entitled to overtime pay unless required by the employee’s contract or company policies.
Some commonly exempted jobs include workers in retail, farming and agriculture, and sales. To find out if your position qualifies for mandatory overtime under the FLSA, consult an employment attorney or visit the Department of Labor website.

What is Considered a Violation of Overtime Wage Requirements?

To recover for an employer violation of FLSA rules regarding overtime wages, the worker must show:

  1. An employer-employee relationship existed;
  2. The employee’s position is not exempted from the FLSA; and
  3. The employer failed to meet the requirements of the FLSA.

Violations of overtime requirements can include:

  • Failure to pay overtime in general;
  • Failure to pay the employee at the correct overtime rate (i.e., charging normal hourly rates for work done overtime);
  • Withholding overtime pay to coerce the employee to do something; and/or
  • Withholding overtime pay in retaliation against an employee who reported a wrongdoing.

How Can I Recover for my Employer’s Violation of Overtime Rules?

Employees usually cannot immediately file a lawsuit against their employer to recover withheld overtime wages. Before having the right to sue the employer in court, the employee must first make a claim with an administrative agency such as the Equal Employment Opportunity Commission (EEOC). 

After a claim is filed, the agency will conduct an investigation and determine if any remedies are appropriate. In addition to back pay, the employer may also be required to adjust their policies according to overtime standards. If the employee believes that the agency’s decision is unsatisfactory, the aggrieved worker can petition the agency to allow them to bring the claim in court. This can be done by requesting a right-to-sue letter from the agency conducting the investigation.

Employees usually have a two-year 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 to failing to pay overtime wages is that the employee falls under an exemption to the 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. However, even if an employee is exempt, they may be able to recover for breach of contract if overtime pay is required by their employment agreement or company policy.

Some jurisdictions allow employers to claim a “good faith” defense. In these states, employers that are honestly unaware that their employees are due overtime pay may be forgiven for failing to do so in the past. However, in the future the employer will be responsible for correctly paying overtime rates when required. 

Do I Need a Lawyer for Overtime Wage Disputes?

If you feel that you have been inappropriately denied overtime pay, you should speak to an employment lawyer. A skilled employment lawyer can file necessary administrative and court paperwork, gather physical evidence, depose witnesses, and represent your interests in administrative and court proceedings.

Photo of page author John Kirby

, LegalMatch Legal Writer

Last Modified: 12-08-2017 03:46 PM PST

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