(Photo Credit: dSeneste.dk/Flickr)
Not all employers are out to take advantage of or cheat their employees out of overtime pay. Some employers make honest mistakes, and those mistakes can be very costly when the employee discovers the problem and files a complaint. It is best for all involved that employers and employees have a clear understanding of overtime laws.
Fair Labor Standards Act (FLSA)
The United States Department of Labor, Wage, and Hour Division explains:
The federal overtime provisions are contained in the Fair Labor Standards Act (FLSA). Unless exempt, employees covered by the Act must receive overtime pay for hours worked over 40 in a workweek at a rate not less than time and one-half their regular rates of pay. There is no limit in the Act on the number of hours employees aged 16 and older may work in any workweek. The Act does not require overtime pay for work on Saturdays, Sundays, holidays, or regular days of rest, unless overtime is worked on such days.
1. The definition of the "workweek" is not Sunday through Saturday.
A workweek consists of seven consecutive 24-hour periods. The workweek does not have to coincide with the calendar week. For example, a workweek for a restaurant chef may be Wednesday through Sunday, with Monday and Tuesday off.
If that chef works ten hours on Wednesday, Thursday, Friday, and Saturday, he has worked 40 hours. Any hours worked on Sunday are overtime hours. The employer may not say that Sunday is the beginning of a new workweek. Sunday is the last day of the chef's workweek, and in this scenario he is entitled to overtime pay for hours worked on Sunday.
2. Employees may not waive overtime.
Some less scrupulous employers may ask employees to waive their right to overtime pay, and take "comp time" instead. Comp time is time paid time off in place of overtime. For example, you work 42 hours one week. The next week you work 38 hours. You are paid your regular rate of pay for 40 hours each of those two weeks.
This is illegal. Overtime hours must be paid overtime rates, and the employee is not allowed to waive this right any more than an employer is allowed to ask.
If an employee works unauthorized overtime hours, the employer may choose to discipline the employee. However, the employer has no choice and must pay overtime wages for any and all overtime worked, whether or not it was authorized.
3. Regular rate of pay sometimes includes more than wages.
Paul Edwards explains in Winning in Overtime:
An employee's regular rate of pay actually includes all forms of compensation (not expressly exempted), including base hourly wage, nondiscretionary bonuses, commissions, on-call pay, shift differentials, reasonable cost of meals, lodging, and cash benefit payments from Section 125 Cafeteria Plans. It does not include gifts, such as purely discretionary Christmas bonuses or turkeys, vacation, or sick pay.
Also, it is illegal for employers to call all bonuses "discretionary" in order to avoid paying accurate overtime wages. If your job includes commissions and bonuses as part of your pay package, these amounts must be included in overtime wage calculations.
Tell Us What You Think
What is your experience with working overtime? Leave us a comment or join the conversation on Twitter.
More from PayScale
No More Overtime?
How Technology Killed the 40-Hour Work Week
Unrealistic Work Goals Are Legal