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We represent workers owed overtime compensation by their employers. There are many ways employers (intentionally or unintentionally) avoid paying overtime. Whether you may be entitled to overtime compensation depends on the facts of your specific situation. Below are some answers to commonly asked questions that might help you to make an initial evaluation. Keep in mind, however, that overtime laws are complex and technical. This general overview is not legal advice. It is only intended to assist in determining if you should get legal advice. For a free consultation on wage and hour violations or whether you may be entitled to unpaid overtime, please contact us.

Do you work more than 40 hours in a work week?

Unless you fall into a few very limited exemptions from overtime (see below: “Does your employer classify you as exempt from overtime? ), federal law requires that you be paid 1 1/2 times your regular hourly rate for all hours worked over 40 per workweek. State laws vary. In Pennsylvania, for example, the law is the same as federal law: employees in the private sector must be paid 1 ½ times their regular hourly rate for all hours worked in excess of 40 per workweek.

Here are some common ways that employers try to avoid paying overtime:

  • paying you at your regular hourly rate for all hours worked regardless of the number of hours that you work in a workweek;
  • paying a day rate for each workday without calculating overtime payments for weeks in which you work more that 40 hours;
  • giving you time off (“comp time”) in a different workweek from the one in which you actually worked overtime.
Does your employer classify you as “exempt” from overtime?

Generally, you are eligible for overtime unless you fit within one or more of the very limited  exemptions to the overtime requirements. Whether or not you do depends on the actual duties  you  perform.

For example, you might be classified as exempt, and thus entitled to overtime, in one or more of the following circumstances:

  • you perform manual or repetitive tasks;
  • you don’t supervise anyone;
  • you don’t have the ability to hire or fire anyone on your own;
  • you don’t have the ability to make decisions or exercise judgement on matters of significance; or
  • you perform the same job duties as other employees who receive overtime.
Do you perform “off the clock” work; that is, before your shift, after your shift or during your lunch break?

If so, you are likely entitled to compensation for all of the time you work, including the following:

  • starting early but not punching in until your scheduled start time;
  • punching out for lunch but continuing to perform work tasks;
  • punching out at the end of your scheduled shift but continuing to perform work.

“Off the clock” work is compensable, and you are entitled to overtime if “off the clock” hours result in your working more than 40 hours in a workweek.

Do you receive per diems or other forms of reimbursements?

Per diems or other forms of expense reimbursement are provided by employers to cover an employee’s lodging, meals, mileage and other expenses incurred while performing his/her job duties.

If you receive a per diem or another form of expense reimbursement but don’t travel long distances, stay in a hotel, or incur other out-of-pocket expenses, these amounts should be included in your hourly or daily rate.

If these expense reimbursements  are not included in the calculation of your hourly or daily rate, you are likely entitled to additional overtime pay.

Do you receive a bonus or other incentive payment?

Bonus or incentive payments must be factored into overtime calculations. The result of this calculation is a “blended rate” that ensures that you get paid overtime on any weekly, monthly, bi-annual or annual bonus or incentive payments you receive.

For example, let’s say Sam is a welder at a local fabrication facility. He receives a quarterly bonus of $1,000 if he meets certain production targets. Sam typically works 50 hours of overtime during each quarter. In Sam’s case, at the end of the quarter his employer must factor the $1,000 into his hourly rate (which makes his overtime rate higher) and pay him any additional amounts he is owed on his 50 hours of overtime.

Are you paid on a day rate basis?

A day rate is a flat amount paid for each day any work is performed. Although federal and Pennsylvania law permit an employer to pay you on a day rate basis, you are nevertheless entitled to 1/2 time for all hours worked over 40 in a workweek.

For example, Seth is a surveyor for a construction company. He is paid $325 each day that he performs any work. He worked 6 days this week and received $1,950 dollars ($325 x 6).  Seth worked 55 hours during the week in question and, as a result, he’s entitled to $266 in overtime for this workweek.

Do you receive overtime in addition to a fixed weekly salary?

Under certain circumstances, the law allows employers to pay employees entitled to overtime compensation a fixed, pre-determined salary each workweek, instead of paying them by the more traditional hourly method. This “fixed salary plus overtime” method is known as a “fluctuating workweek.”

Federal and state law can sometimes differ in determining how to calculate overtime due under a “fluctuating workweek.” Under federal law, you are entitled to only ½ time for all hours worked over 40 in a workweek. This ½ time rate is determined by taking your weekly salary and dividing it by the number of hours you worked during the workweek.

Pennsylvania state law, however, is more generous. Instead of the ½ time to which you are entitled under federal law, Pennsylvania law provides that you are entitled to 1 ½ times your hourly rate for all hours worked over 40 in a workweek. Thus, workers covered by Pennsylvania law are entitled to more pay than they would otherwise get under federal law for overtime worked under a “fluctuating workweek” arrangement.

Does your employer classify you as an “independent contractor”?

To be correctly classified as an independent contractor, you must satisfy several factors. Those factors include:

  • your investment in your business (tools, equipment, etc.);
  • your opportunity for profit/loss;
  • how integral the work you perform is to the company you’re working for;
  • how much control you have over the work you perform and how you perform it; and
  • the length of the arrangement with the company

You might be misclassified as an independent contractor if the company you work for does one or more of the following:

  • provides your equipment/tools/office/telephone, etc.;
  • assigns work to you;
  • dictates how and when that work needs to be performed;
  • requires you have very little investment in your business;
  • makes your arrangement indefinite (not for a specified period of time),
  • requires you to perform work integral to the company’s business (repairing assembly line equipment for a manufacturing company vs. mowing the grass for the manufacturing company)

If you are misclassified as an independent contractor and you work more than 40 hours in a workweek, you are likely entitled to unpaid overtime.

Are you classified as a manager or supervisor?

A common misconception is that the mere title of a manager or supervisor makes an employee exempt from overtime. In fact, your title doesn’t matter.

As a manager or supervisor, in order to be exempt from overtime, you must:

  • be compensated on a salary basis (i.e., paid a guaranteed amount (equal to or greater than $684) calculated on a weekly or less frequent basis);
  • as your primary duty manage the enterprise or department or subdivision of the enterprise;
  • customarily and regularly direct the work of two or more full-time employees or their equivalent; and
  • have the authority to hire/fire employees; or the employer must give particular weight to your suggestions/recommendations as to hiring, firing, advancement, promotion or any change of status of other employees.
Are you “on-call” but not allowed to leave a specific area?

If your employer requires you to remain in a fixed location while “on call,” you should receive compensation for all of the time you are “on-call,” not just the time spent responding to a call.

For example, a call center representative works part-time 8:00 am to 12:00 pm from his/her home. In addition, that call center representative is “on-call” from 12:00 to 5:00 p.m. in the event his/her employer needs additional staffing. The employer requires the call center representative to remain at his/her home and be ready to respond to calls during this “on call” time period. As a result of this requirement, the call center representative is likely entitled to compensation for the entire 12:00-5:00 p.m. shift.

In addition, those same 5 hours must be included as time worked for the purpose of overtime. Frequently, the failure to include compensable “on-call” time in the calculation of hours worked means that the employee is entitled to more overtime compensation than he or she actually received.

If you are paid on a salary basis and your employer considers you exempt from overtime, is your guaranteed weekly salary equal to or greater than $684?

Effective January 1, 2020, the minimum weekly guaranteed salary for an exempt employee increased from $455 per week to $684 per week.

If your employer has classified your position as exempt from overtime, your minimum weekly salary must be at least $684 per week. If your salary is not at least $684 per week, then your position does not meet the criteria for being exempt from overtime. Hence, you are entitled to overtime compensation for any time worked in excess of 40 hours during any workweek.

Talk to an experienced employment lawyer today!

We focus on helping workers and employees across the state of Pennsylvania. Our lawyers have particular expertise in wage-hour law, executive employment contracts and compensation, non-compete agreements, sexual harassment, unlawful retaliation, theft of trade secrets, whistleblowing, and wrongful termination.

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