Is Not Paying Overtime Illegal?

Not paying overtime is illegal in most cases. Federal law dictates that all hourly, also known as non-exempt, employees be paid overtime for hours they work over 40 in a given week. It is important to note that working more than eight hours a day does not constitute overtime. Overtime kicks in when an employee works over 40 hours in a workweek.

The overtime rate is 1.5 times the employee’s regular pay rate. Therefore, an hourly employee making $20 an hour would make $30 an hour for overtime work.

This law falls under the federal Fair Labor Standards Act (FLSA) of 1938. Also, under FLSA:

  • There is no limit to the number of hours an employee can work in a workweek.
  • An employer is not required to pay overtime for work on Saturdays, Sundays, holidays, or regular days of rest unless the employee works overtime on those days. If they are not working overtime, they receive their standard rate of pay for weekend and holiday work.
  • An employer must pay an employee who works overtime, even if the employee works overtime without employer approval.

Not all businesses must comply with the FLSA overtime rules. The FLSA covers only companies that have more than two employees and:

  • Engage in interstate commerce, OR
  • Have sales of at least $500,000 annually

This means that some small businesses may not have to pay their employees overtime, but they must pay it if they are engaged in interstate commerce. There is a broad interpretation of interstate commerce. For example, sending emails, making phone calls, or using the United States Postal Service can be considered interstate commerce.

Employees who have questions about overtime should reach out to an experienced employment lawyer, who can advise which companies and employees are covered under the FLSA.

When is an Employer Not Required to Pay Overtime?

Although not paying overtime is illegal in most cases if a business is covered under FLSA, there are exemptions, including the following:

  • Employees who are paid on a salary basis and make at least $684 per week, as of 2020, are exempt from receiving overtime pay. Note that a salaried employee can still collect overtime if they make less than $684 per week, which amounts to $35,568 per year.
  • Employers are not required to pay overtime to independent contractors and freelancers, as they are not considered employees.

Who is Considered an Exempt Employee?

Every employee under an FLSA-covered business is either exempt or non-exempt. Almost all non-exempt employees are entitled to overtime pay, but exempt workers generally are not entitled.

Exempt workers include salaried employees who make at least $684 per week as well as those who are considered:

  • Executives who manage the company or a division or direct the work of at least two other full-time employees.
  • Administrators who perform non-manual work related to the management and operation of the business and regularly use independent judgment to make important decisions.
  • Professionals whose work requires advanced knowledge/education in a particular field, such as lawyers, doctors, architects, and similar, or whose work is considered intellectual versus routine or manual
  • Highly compensated workers
  • Certain computer workers
  • Certain outside sales workers
  • Railroad workers
  • Truck drivers
  • Apprentices
  • Overtime requirements also do not apply to these specific industries:
    • Fishing
    • Farming
    • Movie theaters
    • Babysitting
    • Newspaper delivery
    • Seasonal amusement businesses, such as amusement parks
    • Small newspapers
    • Small TV and radio stations

Any employee who is entitled to overtime pay should contact an employment lawyer for guidance. Laws and exemptions can be complex, so a knowledgeable lawyer can help.

South Jersey Employment Lawyers at The Law Offices of Leo B. Dubler, III, LLC, Fight for the Rights of All Employees

Studies suggest that many employees who are entitled to overtime pay do not receive it. This is illegal. Any employee who is qualified to receive overtime pay should get every penny they are owed. Employers who try to skirt the laws need to pay up. The South Jersey employment lawyers at The Law Offices of Leo B. Dubler, III, LLC, are ready to fight for the rights of all employees. Call us today at 856-235-7075 or contact us online for a free consultation. With office locations in Mount Laurel and Atlantic City, New Jersey, we proudly serve clients from Cherry Hill, Burlington County, Camden County, and throughout South Jersey.