Overtime and Wage Laws

Beginning July 24, 2009, the minimum wage for hourly employees went up to $7.25 per hour. The hourly wages of workers in the United States is protected by the Fair Labor Standards Act. That law is commonly referred to as the FLSA. The FLSA not only establishes minimum wages for covered workers, it also sets the rate of overtime pay, mandates recordkeeping requirements for employers and sets child labor standards. The law is extremely complex and has hundreds of pages of regulations that apply to all kinds of different employment situations. The most common questions, however, are questions about proper payment of wages and overtime hours. Here is some basic information on these subjects that may answer some questions.

In today’s economy, most employees are covered by the FLSA. Employees are covered if their employer: (1) is engaged in interstate commerce, assists in the production of goods in interstate commerce or even handles, sells or works on goods that move in interstate commerce; and (2) has a gross volume of sales or business of $500,000 or more. But even if the employer does not fit within these broad parameters, an employee may still be covered if he or she personally does work involving interstate commerce. This would include jobs where they regularly handle the mail, use the telephone or internet, handle credit card transactions, or actually concern themselves with shipments of goods from state to state. Also, service workers including cooks, housekeepers, drivers and full-time baby sitters can be covered if they earn a certain amount of income per year and work more than 8 hours a week.

Tipped employees are also covered under the wage and hour laws and are entitled to a minimum of $2.13 per hour as a base wage plus tips. However, if the tips received do not equal the $7.25 minimum wage, the employer must make up the difference. A “tipped employee” is someone who regularly receives more than $30 per month in tips. All tips for such employees must go directly to them unless they participate in a legal tip pooling arrangement.

Unless exempt under some very specific provisions of the FLSA, covered employees are entitled to at least one and one-half times their regular rate of pay if they work more than 40 hours in a work week. A work week is defined as a period of 168 hours during seven consecutive 24-hour days, which period can begin on any day of the week. Determining a person’s overtime pay can be tricky, particularly if they are paid at a based on piecework or is paid a set “salary” for all hours worked. So consultation with attorneys specializing in wage and hour laws is strongly advised.

The FLSA exempts some employees from minimum wage and overtime requirements. For example, employees who are paid a salary of least $455 per week and work as executive, administrative, professional, computer, outside sales or highly compensated personnel are generally exempt. The following is a brief description of these exemptions:

Executive employees are those employees whose primary duty is to manage the company or a division of the company for which they work. The must also regularly supervise and direct the work of two or more full-time employees, have the ability to hire and fire or, at least, recommend the hiring, firing or promotion of other employees.

Administrative employees are those that perform office or non-manual work directly related to the management or general business operations of the company or the company’s customers. Their primary job must also be of the type that includes the exercise of discretion and independent judgment on matters of significance to the company.

Professional employees are employees whose work requires advanced intellectual knowledge and requires regular exercise of discretion and judgment. The advanced knowledge must be in a field of science or learning and usually obtained by a lengthy course of specialized instruction.

Computer employees are exempt if they are either paid at least $455 per week or not less than $27.63 per hour and work as a computer systems analyst, computer programmer, software engineer or other such job. Their duties must also include, among other things, some form of design, development, documentation, analysis, creation, testing or modification of computer systems or programs.

Outside sales employees are exempt if they primarily make sales or obtain orders or contracts for services and regularly do their work away from the company’s place of business.

Highly compensated employees are those that have a total annual compensation of $100,000 or more and perform at least one of the duties of the executive, administrative or professional employees.

These exemptions are commonly called the “white collar” exemptions because they do not apply to “blue collar” workers such as manual laborers, meaning persons that do repetitive work with their hands. These include carpenters, electricians, certain mechanics, plumbers, iron workers, craftsmen, longshoremen, construction workers and similar laborers. Also, the 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.

AS we mentioned at the beginning, the wage and hour laws are extremely complex, incorporate many exceptions and involve federal regulations that are hundreds of pages covering all types of jobs and job circumstances. If you have a question about your rights under the wage and hour laws, please contact us so that we can help guide you and, if necessary, represent you in any case you may have under the FLSA. To further discuss your situation, you can call us toll free at (706) 769-4410, send us an e-mail, or fill out a consultation request form and we will contact you as soon as possible.