Top 3 Problems with Overtime Pay

August 11th, 2009. By AbiK

So, you think everything’s on the up and up when you and your employer make a little agreement on how you’ll be paid for overtime. Usually, everything is on the up and up. But when it comes to exactly how overtime pay is paid out, things can get a little sticky. Here, 3 tricky examples of when overtime pay agreements may seem legitimate in your eyes and your employer’s, but not to the federal government. In this case, big brother’s watching, and it’s a good thing…

1. Fixed Sum for Varying Amounts of Overtime

Any time there’s an agreement for a lump sum to be paid for work performed during overtime hours without regard to the number fo overtime hours worked, it does not qualify as overtime pay—even if the lump sum amount is equal to or greater than the amount of overtime that would be paid on a per-hour basis.

2. Salary for Workweek Exceeding 40 Hours

In some instances an employer may look to establish an agreement with an employee whereby a fixed salary is agreed upon for a regular workweek that’s longer than 40 hours—say 45 hours. Such a salary agreement does not discharge FLSA statutory obligations (translation: the employee is still entitled to whatever the time and a half pay (based on his hourly rate for the 45 hour workweek) would be for any hours worked beyond a 40-hour workweek, regardless of the agreed upon workweek pay arrangement).

3. Overtime Pay May Not be Waived

An employer and employee cannot agree to waive the overtime requirement. Even in the presence of such an agreement, the employee still has a right to overtime compensation for compensable overtime hours that are worked. This also holds true if an employer announces that no overtime work will be permitted, or that overtime work will not be paid for unless authorized in advance. If compensable overtime hours are worked, the employee has a right to compensation.

source: US Department of Labor, Employment Standards Administration, Wage and Hour Division, Fact Sheet #23: Overtime Pay Requirements of the FLSA

Tags: FLSA, Overtime

This was posted on Tuesday, August 11th, 2009 at 8:53 am and is filed under Employment . Feel free to respond, or trackback. Read our comments policy.