Overtime Lawsuits Are On The Rise - For Good Reason

If you work more than 40 hours per week, you are entitled to overtime pay. Overtime laws contained in the United States Fair Labor Standards Act (FLSA) provide minimum wage, overtime, and child labor standards. Overtime rules ensure that employees who are denied overtime pay can file an overtime lawsuit.

Pay for overtime is most every employee's right, with the exception of exempt employees, as long as they have not been misclassified as exempt. Overtime labor laws are in place to ensure that an employer adheres to overtime rules, but employers may look for ways to avoid employee overtime pay. Countless employees have filed lawsuits against their bosses to recoup overtime pay, and increasingly, many of them are winning.

A number of America's biggest employers, including Wal-Mart, Starbucks, IBM, Morgan Stanley and Merrill Lynch, have all been sued for overtime violations, and their employees were awarded back pay and sometimes damages.

Overtime Lawsuits are not only blue collar workers filing lawsuits: traditional white collar workers, from IT workers to stockbrokers to pharmaceutical reps (Abbott Laboratories, AstraZeneca, and Eli Lilly, to name a few) have filed overtime lawsuits, and they have won. All the above companies either face large scale class-action overtime lawsuits or have recently paid out eight- or nine-figure settlements in overtime cases. Some companies have repeatedly violated overtime labor laws.

According to The Department of Labor, more than 197,000 employees received a total of $140.2 million in minimum wage and overtime back wages as a result of Fair Labor Standards Act (FLSA) violations in one year alone. The most frequently cited violation was the payment of straight-time pay for overtime-hours worked.

Overtime—and overtime lawsuits-- is on the rise for a number of reasons. Historically, both employment and overtime have increased as the US economy emerged from recessions. As well, as the US has moved toward a service economy, blue collar and white collar workers are not so clearly defined, causing many workers to be misclassified as exempt. Employers are facing rising healthcare and other benefit costs and to counter their expenses, demanding more hours from employees is more cost -effective than hiring new workers. And some companies avoid paying overtime altogether.

The FLSA requires that most employees in the US be paid at least the federal minimum wage for all hours worked and overtime pay at time and one-half the regular rate of pay for all hours worked over 40 hours in a workweek. (The federal minimum wage is $7.25 per hour effective July 24, 2009. Many states also have minimum wage laws. Some state laws provide greater employee protections; employers must comply with both.)

Overtime Professional AdministrativeHowever, Section 13(a)(1) of the FLSA provides an exemption from both minimum wage and overtime pay for employees employed as bona fide executive, administrative, professional and outside sales employees. Section 13(a)(1) and Section 13(a)(17) also exempt certain computer employees. To qualify for exemption, employees generally must meet certain tests regarding their job duties and be paid on a salary basis at not less than $455 per week. Job titles do not determine exempt status. In order for an exemption to apply, an employee's specific job.

If an employee is covered by the FLSA, an employer cannot disregard an employee’s overtime hours, even if the employee agreed to work for a fixed amount of pay, regardless of the number of hours actually worked.

Overtime FSLAUnder FLSA, employers must pay eligible employees who work more than 40 hours in the workweek at least one and one-half times their regular rate of pay for the overtime hours (hours worked over 40 in a workweek). FLSA defines a workweek as seven consecutive 24-hour periods, or 168 consecutive hours.

Under the FLSA, the following categories of workers are automatically eligible for overtime pay, regardless of how much they earn:

* “Blue collar” workers or other manual laborers who perform work involving repetitive operations with their hands, physical skill and energy;

* Police officers, fire fighters, paramedics and other “first responders”;

* Licensed practical nurses; and * Paralegals.

If you are a non-exempt employee (generally an hourly employee), and you are required to work "off the clock," you may be entitled to overtime compensation. Some examples of working "off the clock" are the following, but there are many, many more examples:

1. Manager requires you to complete a task before leaving work but complains it is taking too long and requires that you clock out while requiring you to complete that task before leaving.

2. Uniforms are required and changed at work before a person clocks in and changed after a person clocks out.

Section 13(a)(1) of the FLSA exempts executive, administrative, professional, and outside sales employees from the FLSA's overtime requirements--as long as they meet certain tests regarding job duties. If these tests are met, they are ineligible for overtime.

To qualify for an exemption from overtime pay requirements under these categories, the employee must generally pass a two-pronged test consisting of a salary basis test and a duties test.

* A salary test is usually met if the employee is paid a fixed amount of money weekly, bi-weekly and/or monthly, and there is no deduction from this fixed rate based on the quantity or quality of the work.

* A duties test is different for executive, administrative and professional employees. The duties test is met by the actual work being done as opposed to "job titles" or written "job descriptions."

To Be Exempt as an Executive Employee, a Person Must:

1. customarily and regularly direct the work of two or more other full-time employees;

2. have management as his/her "primary duty;"

3. have the authority to hire and fire, or effectively to recommend such action or other changes in status;

4. customarily and regularly exercise discretionary powers;

5. spend no more than 20% of his/her hours in the workweek in activities not directly and closely related to the above duties, or 40% in a retail or service establishment.

6. be paid "on a salary basis."


To Be Exempt as an Administrative Employee, a Person Must:
  1. have as his/her "primary duty;"
    1. office or non-manual work directly related to management policies or general business operations; or
    2. performing work in educational administration, which work is directly related to academic instruction or training
  2. customarily and regularly exercise discretion and independent judgment;
    1. regularly and directly assist a bona fide executive or administrative employees; or
    2. perform under only general supervision work that is specialized or technical and that requires special training, experience, or knowledge; or
    3. perform special assignments or tasks under only general supervision;
  4. spend no more than 20% of his/her hours in the workweek in activities not directly and closely related to the above duties, or 40% in a retail or service establishment; and
  5. be paid "on a salary basis."

To Be Exempt as a Professional Employee, a Person Must:
  1. have as his/her primary duty work which requires:
    1. advanced knowledge customarily requiring extensive education; or
    2. originality and creativity in a recognized artistic field; or
    3. teaching or otherwise imparting knowledge as a teacher in a school or in an academic or educational institution; or
    4. theoretical and practical application of highly specialized knowledge in computer systems analysis, programming, and software engineering in a computer/software occupation;
  2. consistently exercise discretion and judgment;
  3. perform work which is predominantly intellectual and varied, and which cannot be standardized in relation to a given period of time.
  4. spend no more than 20% of his/her hours in the week in activities not essential and necessarily incidental to the above duties; and
  5. be paid on "a salary basis."

Outside Sales Exemption

These employees engage in making sales or obtaining orders away from their employer's place of business. They don't devote more than 20 percent of the hours worked by non-exempt employees of the employer to work other than the making of such sales.





The Voss Law Firm, P.C.
The Voss Law Center
26619 Interstate 45 South
The Woodlands, TX 77380

Phone: 281-VICTORY
Toll free: 1-866-276-6179 
Fax: 713-861-0021


The Voss Law Firm, P.C. represents clients on a local, national and international basis. We proudly serve all Texas counties and cities including but not limited to the following: Harris County, Montgomery County, Jefferson County, Houston, The Woodlands, Beaumont, El Paso, San Antonio, Austin, Sugar Land, Dallas, Fort Worth, Orange, and Port Arthur, as well as companies and individuals along the Gulf Coast and around the globe.

 



Business Disputes - Critical Information for All Business Owners
Disputes with Your Insurance Company - What All Consumers Need to Know
Coin Fraud - Is Your Investment at Risk?
See All

Free Case Review

Fill out the form below to claim your FREE CONFIDENTIAL case review.

Name *

Phone *

Email *

Tell us more *



The Voss Law Center
26619 Interstate 45 South
The Woodlands, TX 77380
Phone: 281-VICTORY (842-8679)
Toll Free: 866-276-6179
Get Directions

Social Media

Legal News

Recognition








Videos

FLSA (Overtime) Claims:

Watch All

Testimonials

  • I got treated with respect and things went very well.
  • I look forward to a lasting relationship. I will refer you many clients as we move down the road.
  • Bill Voss was able to quickly grasp our market space, legal challenges and resource obstacles efficiently.
  • I will definitely recommend The Voss Law Firm to all my friends and associates.
  • Por medio de la presente les doy las gracias por su bien trabajo y aprecio los buenos resultados.
  • I want to thank you for all your help and I will recommend you guys to my friends and family. - J. Penaflor

View All

Web Resources

View All