UNDERSTANDING FEDERAL OVERTIME LAW AND THE FLSA

Congress passed a Federal Overtime law, the Fair Labor Standards Act (FLSA) into effect during the great depression. The FLSA establishes minimum wage, overtime pay and record keeping standards affecting employees in the private and government sectors.

Accordingly, the FLSA governs the hours worked and wages earned by American employees. The FLSA requires that, unless a specific applies, employers:

Must pay a minimum wage set by federal law;
Must pay employees overtime (1.5x their regular rate) for hours worked over 40;
Must maintain accurate employment records, including total hours actually worked by employees.

The FLSA covers most employers operating and employees working that work in the United States. Although the FLSA may excuse very small local companies for its requirements, many of these companies still have a legal obligation to pay overtime under applicable state laws.

HISTORY BEHIND THE FLSA

In 1938, Congress enacted the Fair Labor Standards Act (FLSA) in response to the Great Depression. Congress passed the FLSA to protect all covered workers from “substandard wages and oppressive working hours.” 29 U.S.C. § 202(a). As explained by President Franklin Roosevelt, congress designed the act to “ensure all workers received “a fair day’s pay for a fair day’s work.” Message of President Roosevelt to Congress, May 24, 1934.

THE THREE PURPOSES BEHIND THE FLSA'S OVERTIME PROTECTION

The basic framework of the FLSA’s minimum wage and overtime provisions remain unchanged from the 1938 protections. Indeed, the FLSA has prohibited employment for more than 40 hours a week without payment of an overtime premium since 1938. However, the FLSA does not prohibit overtime. Instead, the federal overtime law requires employers to pay a premium for hours worked over 40 each workweek. The overtime compensation provisions of the FLSA serve three purposes:

First, they intend to prevent workers willing to work abnormally long hours from taking jobs away from workers who prefer working shorter hours.
Second, the requirement serves to put financial pressure on employers to reduce unemployment by spreading employment to more workers.
Third, it intended to compensate workers for the increased risk of workplace acccidents caused by exhaustion and overexertion. H.R.Rep. No. 1452, 75th Cong., 1st Sess. (1937); S.Rep. No. 884, 75th Cong., 1st Sess. (1937)).

THE FLSA'S OVERTIME PROTECTIONS & PENALTIES

Section 7 of the FLSA is the source of the FLSA’s overtime protections. The statute provides in pertinent part:

Except as otherwise provided in this section, no employer shall employ any of his employees who in any workweek is engaged in commerce or in the production of goods for commerce, or is employed in an enterprise engaged in commerce or in the production of goods for commerce, for a workweek longer than forty hours unless such employee receives compensation for his employment in excess of the hours above specified at a rate not less than one and one-half times the regular rate at which he is employed.

29 U.S.C. § 207(a)(1). Section 15(a)(2) of the Act, 29 U.S.C. § 215(a)(2) states that it is unlawful for any person to violate section 7 of the Act. Section 207 also lays out penalties for violating the FLSA. Specifically, an employer who violates section 207 are liable for the “unpaid overtime wages” and “an equal amount as liquidated damages.” 29 U.S.C. § 216(b). Accordingly, in an FLSA suit, employees may recover up to twice the amount of their unpaid overtime wages.

THE FLSA'S RECORD KEEPINIG REQUIREMENTS

The FLSA also requires employers to keep accurate employment records for its non-exempt employees. This includes accurate records regarding the hours worked and wages earned by employees. 29 U.S.C. § 11(c). The regulations explaining the FLSA explain the law’s record keeping requirements in detail. Specifically, the FLSA requires employers to maintain records containing the following specific information regarding covered employees:

Start of the Workweek: The time of day and day of week on which the employee's workweek begins.
The Employee’s Regular Rate of Pay: Regular hourly rate of pay for any workweek in which Section 7(a) requires the payment of overtime. This requirement requires employers to explain the basis they use to pay employees, whether per hour, per week, or some other basis.
Hours Worked: Hours worked each workday and workweek.
Straight Time Wages: Earnings or wages due each week, exclusive of overtime.
Total Premium Pay for Overtime Hours: This amount excludes straight time earnings.
Total Wages: The total amount paid to an employee each pay period.
Date of Payment and Pay Period: The date the employee received pay and the time period covered by such payments.

Section 15(a)(5) of the FLSA makes it unlawful for a person to violate the FLSA’s record keeping provisions. 29 U.S.C. § 215(a).

FEDERAL OVERTIME VIOLATIONS

Whether intentionally or not, employers commonly fail to comply with the FLSA’s overtime or record keeping provisions. However, employees often remain unaware that their employer has violated their right to overtime under federal law. For example, many think that an employee paid a salary necessarily qualifies for an exemption from the FLSA’s overtime protections. This belief has no legal basis. Indeed, an employer must meet strict tests to prove an employee qualifies for an exemption in an overtime lawsuit.

To meet these tests, an employer must first show that an employee earned at least $684 dollars in salary per week. Second, the employer must prove the employee performed job duties to qualify for the applicable exemption. We invite you to learn more about the most commonly claimed overtime exemptions. To do so, please review the Department of Labor presentation found here. The document provides a detailed requirements an employee must meet to qualify for the executive, administrative and professional exemptions. Employers also often attempt to avoid paying work by classifying them as independent contractors.

However, courts frequently find that workers labeled as “contractors” actually qualify as “employees” entitled to overtime under the FLSA. Employers also regularly violate the FLSA by taking deductions from employees’ wages and tips. The Siegel Law Group’s overtime violation attorneys have extensive knowledge and experience litigating FLSA actions. If you think your employer may have violated your rights, we invite you to contact our unpaid overtime lawyers to evaluate your case.