Overtime Wages: What Employees and Employers Should Know

Sometimes, employers need employees to put in extra time at work. It happens, and many hardworking employees are happy to be a team player and work the extra hours.

But under what circumstances is an employer responsible for paying their employees overtime pay? And how is overtime pay calculated?

In this article, we will discuss the basics of overtime pay laws, how they apply to Florida employers and employees, and provide some examples of how overtime pay is calculated.

Overtime Pay Requirements

The Fair Labor Standards Act (“FLSA”) and regulations promulgated by the U.S. Department of Labor are the federal laws governing who is entitled to overtime wages and how overtime wages are calculated.

The FLSA also sets federal minimum wage and recordkeeping standards for employers, among other requirements. Currently, Florida law does not address overtime wages, and therefore, the FLSA overtime laws govern Florida employers and employees.

Calculation of Overtime Under the FLSA

Under the FLSA, covered employers are required to pay any employee covered by the FLSA at least one and one-half (1.5) times the employee’s regular rate of pay for all hours worked over 40 hours per work week. This includes overtime wages earned by tipped and non-tipped employees.

The FLSA applies on a workweek basis, meaning that a covered employee’s workweek is a fixed and regularly occurring period of seven consecutive days.

Thus, when a covered employee works more than 40 hours in a work week, that employee is entitled to overtime wages. Importantly, the FLSA allows employers to set a covered employee’s work week, so long as the work week is consistently seven consecutive days. This means a covered employee’s workweek does not have to coincide with a calendar week (i.e., Sunday through Saturday).

Additionally, even if a covered employee is paid, for example, on a bi-weekly basis, an employer must calculate hours worked per work week. An employer cannot average an employee’s hours over two weeks to reduce overtime wages owed to an employee.

No Automatic Premium Pay Under the FLSA

Furthermore, under the FLSA, covered employees are not automatically entitled to overtime or “premium” pay for time worked on holidays, weeknights, and weekends.

Finally, an employer must generally pay a covered employee all overtime wages earned during a work week on the employee’s regular payday for the pay period in which the overtime wages were earned.

Who is Covered by the FLSA and Entitled to Overtime Wages?

Not all employees are entitled to overtime wages for hours worked over 40 hours per work week. Thus, it is important to understand who may be considered a “covered” employee under the FLSA and, therefore, entitled to overtime wages.

Employer Coverage Under the FLSA

First, not all employers are covered by the FLSA, and therefore, those employers may not be required to pay employees overtime wages. However, in most cases, they are and must pay “nonexempt” employees overtime wages for all hours worked over 40 hours per work week.

Exempt vs. Nonexempt Employees

Additionally, under the FLSA, employees are classified as “exempt” or “nonexempt” workers. Most employees perform nonexempt work and are, therefore, properly classified as nonexempt employees who may be entitled to overtime wages.

However, some employees may be exempt from the FLSA’s overtime pay provisions. Employers are not required to pay overtime wages to employees who are properly classified as exempt and who may work more than 40 hours per work week. Common exemptions include administrative, executive, and professional worker exemptions, among several others.

Independent Contractors and Overtime

Finally, FLSA overtime wage requirements apply only to employees, not independent contractors. Thus, independent contractors are not entitled to overtime wages even if they performed work in excess of 40 hours in a work week.

Whether an employee is considered covered, exempt, nonexempt, or an independent contractor under the FLSA or Florida law can be complex. Florida employers or employees concerned about coverage and classification issues should consult with the attorneys at BT Law Group.

Examples: Nonexempt Hourly Employee

Example 1: Ann is employed as a full-time Retail Sales Associate for a large clothing company in Florida. She is paid the current Florida minimum wage of $12.00 per hour, and is paid weekly. Ann’s employer has properly classified Ann as a “nonexempt” employee. Typically, Ann works less than 40 hours per work week, but recently, her employer asked Ann to work two additional shifts. During this work week, Ann worked a total of 56 hours. Therefore, Ann is entitled to:

• $480 for 40 hours’ pay at her regular hourly rate of $12.00 plus
• $288 for 16 hours of overtime pay (1.5 x $12.00/hour x 16 hours) =
• $768 total workweek pay (before applicable taxes and/or deductions)

Example 2: Joe is employed as a part-time front desk receptionist for a small marketing firm in Florida. Joe is paid $18.00 per hour, and he typically works 20 hours per work week.

As with the prior example, Joe’s employer is covered by the FLSA and has properly classified Joe as a “nonexempt” worker. Recently, Joe’s employer asked him to cover for another receptionist who was out on sick leave. During this workweek, Joe worked a total of 42 hours. Therefore, Joe’s employer owes him pay for:

• $720 for 40 hours’ pay at Joe’s regular rate of pay ($18.00 per hour) plus
• $54 for 2 hours of overtime pay (1.5 x $18.00/hour x 2 hours) =
• $774 total workweek pay

It is important to note that under the FLSA, even though Joe is a part-time employee, he is still entitled to overtime wages for any time worked over 40 hours in a work week.

Also of note, tipped employees (or employees who earn at least $30.00 in tips per month as part of their regular wages and are employed in a position that customarily and regularly receives tips) are also entitled to overtime pay if they work more than 40 hours in a work week.

However, because a tipped employee’s hourly pay rate is often less than a non-tipped employee, how overtime wages are calculated is a bit more complicated. Florida employers or employees concerned about overtime wages for tipped employees should consult with the attorneys at BT Law Group.

Example: Salaried Employee

Employees (and some employers) may assume that if an employee is paid a salary, then the employee is not entitled to overtime wages. This is not the case under the FLSA. Salaried employees who earn less than $684 per workweek (or less than $35,568 annually) must be paid overtime wages for time worked over 40 hours per workweek regardless of whether they are classified as “exempt” or “nonexempt” workers.

Additionally, even salaried employees earning $684 per work week or more (or $35,568 annually or more) may be entitled to overtime wages if the employee primarily performs nonexempt job duties. However, as mentioned above, where an employee is properly classified as “exempt” is a fact-specific analysis that should be undertaken with the guidance of experienced employment counsel.

Record and Posting Requirements

Under the FLSA, covered employers must maintain certain records for each nonexempt employee. These records include hours worked each day, total hours worked each work week, the employee’s regular hourly rate of pay, total overtime earnings for the work week, and total wages paid per pay period, among several others.

The FLSA requires covered employers to maintain all payroll records for at least three years. Additionally, under the Act, covered employers must also maintain records on which wage computations are based, such as timecards and work schedules. Maintaining accurate records is of paramount importance in ensuring that nonexempt employees are paid accurately and for all time worked, including earned overtime wages.

Additionally, under the FLSA, covered employers must also post (and keep posted) a notice explaining employee minimum wage and overtime pay requirements under the Act, among other requirements. The notice must be posted in a conspicuous place in the workplace so that employees may readily read it. Florida employers may also have additional posting requirements under Florida’s minimum wage laws.

Employer Time-Keeping Policies

While not specifically required under the law, Florida employers should consider implementing an employee timekeeping policy. A timekeeping policy informs employees how they should record and track their time worked.

As relevant here, the timekeeping policy should also address whether or not an employee needs explicit permission before working overtime hours or working hours not expressly authorized.

A clear and consistently applied timekeeping policy may aid employers and employees in maintaining accurate time records, as well as helping to ensure employees are accurately paid for all overtime worked. Florida employers should work with the attorneys at BT Law Group to prepare (or update) a timekeeping policy.

Consult with BT Law Group for Overtime Wage Concerns

Employees need to be paid for all time worked, including proper overtime pay for employees properly classified as non-exempt. Florida employers and employees should review their timekeeping and payroll systems and records to ensure proper payment of all overtime wages owed.

While the U.S. Department of Labor provides several resources and fact sheets regarding overtime pay requirements under the FLSA, overtime pay issues can be complex.

Florida employees who believe they are owed overtime wages should seek legal counsel from a Florida employment attorney. BT Law Group has extensive experience in advising clients about and litigating claims related to unpaid overtime wages.

Florida employers who are concerned about compliance with the FLSA or who may be facing employee claims for unpaid overtime wages should also seek counsel from a Florida wage and hour attorney. BT Law Group also has extensive experience advising and defending Florida employers facing overtime wage issues and claims.