In a BLR webinar titled "Reducing Overtime Costs: What You Legally Can—and Can't—Do to Keep Workers at Their Straight-Time Rates," Laura P. Worsinger, Esq., explained how to determine whether workers must be paid overtime.
Workers must be classified as non-exempt employees (and paid overtime) if they cannot:
- Fit into an exempt category (Executive, Professional, or Administrative), or
- Qualify as exempt as computer professionals, inside or outside salespeople, or
- Meet the criteria for independent contractors.
More Rigorous State Tests
Employers need to understand how both the federal Fair Labor Standards Act (FLSA) and state wage and hour laws apply to them. Worsinger explained that there are more rigorous tests for exemptions from overtime requirements in certain states (e.g., California).
Stricter duties test. This test is a rigorous analysis of the employee's actual duties:
- In Califorinia, more than 50 percent of the duties must fall within the executive, administrative, or professional exemptions.
- Under the FLSA, an employee is exempt if non-exempt duties are not "primary" and are "incidental" to the employee's "primary duties."
Hours in a workweek. State and federal overtime laws also differ in terms of hours worked:
- Under the FLSA, overtime is due only when non-exempt employees work more than 40 hours in a workweek. There is no limit 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, as such.
- In California, Alaska, Colorado and Nevada, overtime of 1.5 times the hourly rate also must be paid for all hours worked over eight in a day and 40 in a week, and double the hourly rate must be paid for all hours over 12 in a day. The 40-hour week, however, continues to apply in New York.
Overtime Pay May Not Be Waived
The overtime requirement may not be waived by agreement between the employer and employees.
An agreement that only 8 hours a day or only 40 hours a week will be counted as working time also fails the test of FLSA compliance.
An announcement by the employer that no overtime work will be permitted, or that overtime work will not be paid unless authorized in advance, is also prohibited.
Laura P. Worsinger, Esq. is Of Counsel with the Los Angeles office of Dykema Gossett PLLC. She has broad counseling and litigation experience and specializes in the defense of employers in individual and class actions involving wage and hour violations, misclassification, discrimination, wrongful termination, and other employment-related proceedings. She can be contacted at email@example.com.