Overtime Pay Calculator.
Overtime pay depends on the nature of the job functions performed by an employee, not the employee’s title or whether the employee was paid on an hourly or salaried basis. In order to be exempt, employees must typically be paid on a salary basis, and they must perform job duties that the Department of Labor has classified as exempt. Merely paying an employee on a salary basis does not exempt an employee from FLSA overtime requirements. While other exemptions exist, the most-frequently encountered are the executive exemptions. When Congress enacted the FLSA, it created an exemption from the overtime pay requirements for “any employee employed in a bona fide executive, administrative, or professional capacity or in the capacity of outside salesman.” The Department of Labor issued revisions to the overtime pay provisions of the FLSA in 2004, setting forth the following standards for the executive exemptions for employees paid a guaranteed minimum salary of no less than $455 per week:
Executive Employee Exemption from Overtime Pay.
In order to qualify for the Executive Employee Exemption, all of the following tests must be met:
The employee must be compensated on a salary basis (as defined in the regulations) at a rate not less than $455 per week;
The employee’s primary duty must be managing the enterprise, or managing a customarily recognized department or subdivision of the enterprise;
The employee must customarily and regularly direct the work of at least two or more other full-time employees or their equivalent; and
The employee must have the authority to hire or fire other employees, or the employee’s suggestions and recommendations as to the hiring, firing, advancement, promotion or any other change of status of other employees must be given particular weight.
Administrative Employee Exemption from Overtime Pay.
The administrative employee exemption applies to bar overtime pay to salaried managers whose primary job duties include the overall management of the business operations. In order to qualify for the Administrative Employee exemption, all of the following tests must be met:
The employee must be compensated on a salary or fee basis (as defined in the regulations) at a rate not less than $455 per week;
The employee’s primary duty must be the performance of office or non-manual work directly related to the management or general business operations of the employer or the employer’s customers; and
The employee’s primary duty includes the exercise of discretion and independent judgment with respect to matters of significance.
Learned Professional Exemption from Overtime Pay.
The Learned Professional Exemption applies to bar overtime compensation for architects, attorneys, CPA’s, veterinarians and certain other professionals. In order to qualify for the Administrative Employee exemption, all of the following tests must be met:
The employee must be compensated on a salary or fee basis (as defined in the regulations) at a rate not less than $455 per week;
The employee’s primary duty must be the performance of work requiring advanced knowledge, defined as work which is predominantly intellectual in character and which includes work requiring the consistent exercise of discretion and judgment;
The advanced knowledge must be in a field of science or learning; and
The advanced knowledge must be customarily acquired by a prolonged course of specialized intellectual instruction.
Creative Professional Exemption from Overtime Pay.
The Creative Professional Exemption applies to bar FLSA coverage for certain writers, producers, directors and other employees working within creative fields. In order to qualify for the Creative Professional employee exemption, all of the following must be satisfied:
The employee must be compensated on a salary or fee basis (as defined in the regulations) at a rate not less than $455 per week; and
The employee’s primary duty must be the performance of work requiring invention, imagination, originality or talent in a recognized field of artistic or creative endeavor.
Computer Employee Exemption from Overtime Pay.
The Computer Employee Exemption has been recently revised and no longer requires that employees be paid on a salary basis. In order to qualify for the computer employee exemption, the following must be satisfied:
The employee must be compensated either on a salary or fee basis (as defined in the regulations) at a rate not less than $455 per week or, if compensated on an hourly basis, at a rate not less than $27.63 an hour;
The employee must be employed as a computer systems analyst, computer programmer, software engineer or other similarly skilled worker in the computer field performing the duties described below; and
The employee’s primary duty must consist of:
The application of systems analysis techniques and procedures, including consulting with users, to determine hardware, software or system functional specifications;
The design, development, documentation, analysis, creation, testing or modification of computer systems or programs, including prototypes, based on and related to user or system design specifications;
The design, documentation, testing, creation or modification of computer programs related to machine operating systems; or
a combination of the aforementioned duties, the performance of which requires the same level of skills.
Outside Sales Exemption from Overtime Pay.
The Outside Sales Exemption applies to bar FLSA coverage for employees engaged in outside sales activities (salespersons who travel to their clients and call on the clients at the client’s location). Inside sales people (individuals who place sales calls from their employee’s offices) are not exempted by the Outside Sales Exemption. In order to qualify for the outside sales employee exemption, all of the following tests must be satisfied:
The employee’s primary duty must be making sales (as defined in the FLSA), or obtaining orders or contracts for services or for the use of facilities for which a consideration will be paid by the client or customer; and
The employee must be customarily and regularly engaged away from the employer’s place or places of business.
Highly Compensated Employees and Overtime Pay.
Highly compensated employees performing office or non-manual work and paid total annual compensation of $100,000 or more (which must include at least $455 per week paid on a salary or fee basis) are exempt from the FLSA if they customarily and regularly perform at least one of the duties of an exempt executive, administrative or professional employee identified in the standard tests for exemption.
Blue Collar Workers and Overtime Pay.
The above-listed exemptions provided by FLSA Section 13(a)(1) only apply to “white collar” employees that meet the salary and duties tests set forth in the Part 541 regulations. The exemptions do not apply to manual laborers or other traditionally “blue collar” workers who perform work involving repetitive operations with their hands, physical skill and energy. Non-management employees working in production, maintenance, construction and similar occupations (such as carpenters, electricians, mechanics, plumbers, iron workers, craftsmen, operating engineers, longshoremen, construction workers and laborers) are entitled to minimum wage and overtime premium pay under the FLSA no matter how highly paid they might be, notwithstanding any of the above-listed exemptions.
Police, Fire Fighters, Paramedics & Other First Responders and Overtime Pay.
The above exemptions do not apply to police officers, detectives, deputy sheriffs, state troopers, highway patrol officers, investigators, inspectors, correctional officers, parole or probation officers, park rangers, fire fighters, paramedics, emergency medical technicians, ambulance personnel, rescue workers, hazardous materials workers and similar employees, regardless of rank or pay level, who perform work such as preventing, controlling or extinguishing fires of any type; rescuing fire, crime or accident victims; preventing or detecting crimes; conducting investigations or inspections for violations of law; performing surveillance; pursuing, restraining and apprehending suspects; detaining or supervising suspected and convicted criminals, including those on probation or parole; interviewing witnesses; interrogating and fingerprinting suspects; preparing investigative reports; or other similar work.
Other Exemptions to Overtime Pay.
Certain other exemptions may apply to exempt employees working in the following industries from receiving overtime compensation:
o Employees of independent bulk petroleum dealers;
o Commission sales workers in retail, trade, service establishments;
o Employees of seasonal amusement and recreational establishments
o Agricultural employees
o Buyers of agricultural products
o Employees of limited circulation newspapers
o Employees of ratio, TV stations in small markets
o Switchboard operators of small telephone exchange
o Drivers and loaders employed by motor carriers where the vehicles driven weigh more than
o Railroad employees
o Air transportation employees
o Salesmen, automotive partsmen, mechanics employed by auto dealers
o Country elevator workers
o Sugar processing employees
o Taxicab drivers
o Domestic employees who live-in so long as no more than 20% of job duties is general
o Fishing and forestry
o Motion picture theatre employees
o Lumber operations employees
Certain of the above-referenced exceptions are currently in flux so we encourage you to contact the attorneys at Pelton & Associates, PC to discuss if an exception applies to your exact employment situation.
Other Laws & Collective Bargaining Agreements and Overtime Pay.
While the FLSA provides minimum standards of overtime pay that may not be waived or reduced, employers must also comply with any Federal, State or municipal laws establishing a higher minimum wage or lower maximum workweek than those established under the FLSA. Similarly, employers may provide a higher wage, shorter workweek, or greater overtime premium than that required by the FLSA pursuant to a collective bargaining agreement. While collective bargaining agreements cannot waive or reduce FLSA protections, nothing in the FLSA or the Part 541 regulation relieves employers from their contractual obligations under such bargaining agreements. Additional FLSA exemptions may also exist for employees working in the fields of agricultural, emergency services, commercial transportation (rail, marine, trucking & livery drivers) and live-in healthcare providers.
Employees & Hours Covered by the FLSA Overtime Pay.
The FLSA defines the term “employ” to include the words “suffer or permit to work.” Suffer or permit to work means that if an employer requires or allows employees to work, then any time spent is generally considered to be hours worked. Time spent doing work not specifically requested by the employer, but still allowed, is typically hours worked because the employer knows or has reason to believe that the employees are continuing to work and the employer is benefiting from the work performed. This practice is commonly referred to as “working off the clock” and is increasingly common as employees check and respond to email while at home. Further, when am employer requires its employees to correct mistakes in his or her work, the time correcting the mistakes must be treated as hours worked, even if the employee voluntarily performs such work.
Time in which an employee is: (i) required to be at work or (ii) allowed to work for his or her employer is hours worked. Even if a person is hired to do nothing at all, or to do nothing but wait for something to do, that person is still performing work while waiting under the FLSA. The Supreme Court has stated that employees subject to the FLSA must be paid for all the time spent in “physical or mental exertion (whether burdensome or not) controlled or required by the employer and pursued necessarily and primarily for the benefit of the employer of his business.”
When calculating the number of hours worked you must consider all the time during which an employee is required or allowed to perform work for an employer, regardless of where the work is completed. An employer is not allowed to sit back and accept the benefits of an employee’s work without considering the time spent to be hours worked under the law. Merely making a rule against such work is not enough where employees fail to abide by their employment practices. Employees generally may not volunteer to perform work without the employer having to count the time as hours worked, whether such work is performed on the employer’s premises, at a designated work place, at home or at some other location.
For updated and accurate descriptions, please log onto http://www.dol.gov/elaws/elg/