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Frequently Asked Questions (FAQ)

Frequently Asked Questions

What is overtime?

Overtime is premium pay of 1.5 times the regular rate of pay for working more than 40 hours in a workweek.

Who is eligible for overtime?

All employees are entitled to be paid overtime unless they fall under certain narrow exemptions.  Under the new rules that will go into effect on December 1, 2016, regardless of an employee’s duties, employees who earn less than $913 per week, or ($47,476 per year) will eligible for overtime. This applies to both hourly and salaried workers.

What changes do the new Department of Labor regulations make?

The new rules would:

  • increase the minimum salary that an employee must be paid in order to not be paid overtime from $455 per week to $913 per week; and
  • automatically update the minimum salary every three years, based on wage growth over time, so that as wages grow, so too does the minimum salary.
How many workers would the new rules affect?

According to the Department of Labor, the new rules would extend overtime protections to $4.2 million workers across the country.

How do I determine my overtime rate?

The overtime rate is one and a half times your hourly rate, if you are paid by the hour.  If you are salaried, you can determine your regular rate by dividing your total weekly compensation by the number of hours you worked.  Your overtime rate would be one and a half times the regular rate for each hour you worked over forty.

Can my employer count bonuses and commissions toward the $47,476 minimum?

Under the new rules, only up to 10% of the $47,476 can come from non-discretionary bonuses, incentive payments, and commissions, if the employer makes those payments at least once every quarter.

How do I know if I fall under an overtime exemption?

In general, employees are exempt – or ineligible for overtime – if all of the requirements below are met:

1.    Must be salaried – i.e., paid a predetermined and fixed amount that is not reduced based on quality or quantity of work;
2.    Must be paid at least $913 per week (under the new rules) or $455 per week (under the current rules); and
3.    Must primarily perform executive, administrative, or professional duties, as defined by Department of Labor regulations.

Certain employees do not have to be paid a minimum salary, such as doctors, teachers, lawyers, and outside salespeople. 

If my employer doesn’t keep time records, how will I be paid overtime?

Employers are required to keep accurate wage and hour records, including hours that overtime eligible employees work.  If your employer fails to maintain time records, and you are entitled to overtime, your best recollection of the hours you worked – even if rough – may be sufficient to show the amount of overtime worked.  If your employer does not keep accurate time records, it is a good idea for you to keep your own, contemporaneous records of the hours you worked each day.

Are all employers required to comply with the new overtime rules?

In general, federal overtime law, including the new overtime rules, covers businesses with at least $500,000 in gross volume of sales or business done annually.  Certain businesses are covered regardless, such as hospitals, businesses providing medical or nursing care for residents, schools (whether operated for profit or not for profit), and public agencies.  Even if a business is not covered, individual employees may be covered if they perform business activities that affect interstate commerce (i.e., are not purely at a local level).

I work for a non-profit. Am I entitled to overtime?

There is no exception under federal overtime law for non-profits.  The same rules apply to non-profits that apply to other employers.  If a non-profit is engaged in ordinary commercial activities that result in at least $500,000 in annual gross volume of sales or business done, or has employees who perform work affecting interstate commerce, the non-profit must comply with federal overtime law.

I work for a school or institution of higher learning. Am I entitled to overtime under the new rules?

Employees of schools and institutions of higher education are generally protected by federal overtime law. However, teachers are exempt if their primary duty is teaching, tutoring, instructing or lecturing. “Teachers” include kindergarten or nursery school teachers, teachers of gifted or disabled children, professors, adjunct instructors, teachers of skilled and semi-skilled trades and occupations, home economics teachers, vocal or instrument music teachers, and under certain circumstances, athletic coaches and assistant coaches. Other special rules apply to graduate students performing research and administrative personnel who help to run higher education institutions and interact with students outside the classroom, such as department heads, academic counselors and advisors, and intervention specialists. Public universities or colleges that qualify as a "public agency" under the federal overtime law may compensate overtime-eligible employees with compensatory time off in lieu of paid overtime.

 

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If you believe you are eligible for overtime pay or you are being paid incorrectly, please contact us for a free consultation.