Which employees are entitled to minimum wage and overtime pay?
The Fair Labor Standards Act (FLSA) establishes minimum standards for minimum wage and overtime pay for both full‑time and part‑time workers, in the private and public sectors. Each state may choose to enhance the minimum standards to increase the minimum wage or provide overtime in additional circumstances, like based on daily hours worked.
Which Employers / Employees are covered under the FLSA?
Certain businesses are required to pay minimum wage and / or overtime
The Act applies to enterprises with employees who engage in interstate commerce, produce goods for interstate commerce, or handle, sell, or work on goods or materials that have been moved in or produced for interstate commerce. For most firms, a test of not less than $500,000 in annual dollar volume of business applies (i.e., the Act does not cover enterprises with less than this amount of business).
The Act also applies to the following regardless of their dollar volume of business:
- hospitals; institutions primarily engaged in the care of the sick, aged, mentally ill, or disabled who reside on the premises;
- schools for children who are mentally or physically disabled or gifted;
- preschools, elementary and secondary schools, and institutions of higher education; and
- federal, state, and local government agencies.
Certain employees, because of their job duties, are required to get minimum wage and / or overtime, individually, even if the business as a whole is not required to pay overtime
Employees of firms that do not meet the $500,000 annual dollar volume test may be covered in any workweek when they are individually engaged in interstate commerce, the production of goods for interstate commerce, or an activity that is closely related and directly essential to the production of such goods.
The following are examples of positions that are usually non-exempt and therefore entitled to minimum wage and / or overtime:
- Clerks of various kinds who perform routine clerical duties,
- Cosmetologists and Barbers,
- Building Inspectors,
- Production Line Workers,
- First Responders such as:
- Police officers,
- Deputy sheriffs,
- State troopers,
- Highway patrol officers,
- Correctional officers,
- Parole or probation officers,
- Park rangers,
- Fire fighters,
- Emergency medical technicians,
- Ambulance personnel,
- Rescue workers,
- Hazardous materials workers and similar employees
- Licensed Practical Nurses and other similar health care employees,
- Registered Nurses who are not paid a salary,
- Financial services employees who are selling financial products,
- Maintenance Workers,
- Manual laborers or other "blue collar" workers who perform work involving repetitive operations with their hands, physical skill and energy, including non-management:
- Construction Workers,
- Iron workers,
- Operating engineers,
- Construction workers, and
- Security Guards,
- Concierge Staff,
- Salaried sales people in retail, wholesale or service establishments (like Radio Shack, Walmart and Target, as examples),
- Television newscast producers, station directors, assignment reporters and editors whose primary duty relate to the production aspect of a television station's business,
- Employees of newspapers, magazines, television and other media if they only collect, organize and record information that is routine or already public, or if they do not contribute a unique interpretation or analysis to a news product.
- Reporters whose work products are subject to substantial control by their employer,
- Paralegals and legal assistants,
- Pharmacists and Pharmacy Technicians,
- Unlicensed Engineers or Junior Drafters,
- Automobile damage appraisers employed by an insurance company.
- Technologists and technicians, such as:
- engineering technicians,
- ultrasound technologists,
- licensed veterinary technicians,
- avionics technicians,
- Veterans with only military training doing "blue collar" occupations or technical fields
Oftentimes, people designated as "managers" are entitled to overtime. It is not the title, but the work that is performed that determines whether the employee should be getting overtime.
In addition, the Act covers:
- domestic service workers, such as day workers,
- cooks, or
- full‑time babysitters,
if they receive at least $1,700 in 2009 in cash wages from one employer in a calendar year, or if they work a total of more than eight hours a week for one or more employers.
The Act exempts some employees from its overtime pay and minimum wage provisions, and it also exempts certain employees from the overtime pay provisions only. To be exempt means that you should not be getting minimum wage and/or overtime pay. The following are examples of employees exempt from both the minimum wage and overtime pay requirements:
- Executive employees,
- Administrative employees, and
- Professional employees (including teachers and academic administrative personnel in elementary and secondary schools),
- Outside Sales Employees, and
- certain Skilled Computer Professionals
- Employees of certain seasonal amusement or recreational establishments
- Employees of certain small newspapers and switchboard operators of small telephone companies
- Seamen employed on foreign vessels
- Employees engaged in fishing operations
- Employees engaged in newspaper delivery
- Farm workers employed on small farms (i.e., those that used less than 500 "man‑days" of farm labor in any calendar quarter of the preceding calendar year)
- Casual babysitters and persons employed as companions to the elderly or infirm
The following are examples of employees exempt from the overtime pay requirements only:
- Certain commissioned employees of retail or service establishments
- Auto, truck, trailer, farm implement, boat, or aircraft salespersons employed by non‑manufacturing establishments primarily engaged in selling these items to ultimate purchasers
- Auto, truck, or farm implement parts‑clerks and mechanics employed by non-manufacturing establishments primarily engaged in selling these items to
- Railroad and air carrier employees, taxi drivers, certain employees of motor carriers, seamen on American vessels, and local delivery employees paid
on approved trip rate plans
- Announcers, news editors, and chief engineers of certain non‑metropolitan broadcasting stations
- Domestic service workers who reside in their employers' residences
- Employees of motion picture theaters
Certain employees may be partially exempt from the overtime pay requirements. These include:
- Employees engaged in certain operations on agricultural commodities and employees of certain bulk petroleum distributors
- Employees of hospitals and residential care establishments that have agreements with the employees that they will work 14‑day periods in lieu of 7‑day workweeks (if the employees are paid overtime premium pay within the requirements of the Act for all hours worked over eight in a day or 80 in the
14‑day work period, whichever is the greater number of overtime hours)
- Employees who lack a high school diploma, or who have not completed the eighth grade, who spend part of their workweeks in remedial reading or training in other basic skills that are not job specific. Employers may require such employees to engage in these activities up to 10 hours in a workweek. Employers must pay normal wages for the hours spent in such training but need not pay overtime premium pay for training hours
The Act requires employers of covered employees who are not otherwise exempt to pay these employees a minimum wage of not less than $7.25 per hour effective July 24, 2009. Youths under 20 years of age may be paid a minimum wage of not less than $4.25 an hour during the first 90 consecutive calendar days of employment with an employer. Employers may not displace any employee to hire someone at the youth minimum wage. Certain state have higher minimum wages rates than the federal government, including:
- AK - $7.75
- CA - $8.00
- CT - $8.25 - The Connecticut minimum wage rate automatically increases to 1/2 of 1 percent above the rate set in the Fair Labor Standards Act if the Federal minimum wage rate equals or becomes higher than the State minimum.
- DC - $8.25 - In the District of Columbia, the rate is automatically set at $1 above the Federal minimum wage rate if the District of Columbia rate is lower.
- IL - $8.00; $8.25 from 7/10/2010 on.
- MA - $8.00 - The Massachusetts minimum wage rate automatically increases to 10 cents above the rate set in the Fair Labor Standards Act if the Federal minimum wage equals or becomes higher than the State minimum.
- ME - $7.50
- MI - $7.40
- NV - $7.55
- NM - $7.50
- OH - $7.30
- OR - $8.40
- RI - $7.40
- VT - $8.06
- WA - $8.55
Employers may pay employees on a piece‑rate basis, as long as they receive at least the equivalent of the required minimum hourly wage rate and overtime for hours worked in excess of 40 hours in a workweek. Employers of tipped employees (i.e., those who customarily and regularly receive more than $30 a month in tips) may consider such tips as part of their wages, but employers must pay a direct wage of at least $2.13 per hour if they claim a tip credit. They must also meet certain other requirements.
The Act also permits the employment of certain individuals at wage rates below the statutory minimum wage under certificates issued by the Department of Labor:
- Student learners (vocational education students);
- Full‑time students in retail or service establishments, agriculture, or institutions of higher education; and
- Individuals whose earning or productive capacities for the work to be performed are impaired by physical or mental disabilities, including those
related to age or injury.
The Act does not limit either the number of hours in a day or the number of days in a week that an employer may require an employee to work, as long as the employee is at least 16 years old. Similarly, the Act does not limit the number of hours of overtime that may be scheduled. However, the Act requires employers to pay covered employees not less than one and one‑half times their regular rate of pay for all hours worked in excess of 40 in a workweek, unless the employees are otherwise exempt.
An employee's workweek is a fixed and regularly recurring period of 168 hours -- seven consecutive 24-hour periods. It need not coincide with the calendar week, but may begin on any day and at any hour of the day. Different workweeks may be established for different employees or groups of employees. Averaging of hours over two or more weeks is not permitted.
The Act does not require overtime pay for work on Saturdays, Sundays, holidays, or regular days of rest, as such.
Earnings may be determined on a piece-rate, salary, commission, or some other basis, but in all such cases the overtime pay due must be computed on the basis of the average hourly rate derived from such earnings. This is calculated by dividing the total pay for employment (except for the statutory exclusions noted above) in any workweek by the total number of hours actually worked.
Overtime Pay May Not Be Waived: The overtime requirement may not be waived by agreement between the employer and employees. An agreement that only 8 hours a day or only 40 hours a week will be counted as working time also fails the test of FLSA compliance. An announcement by the employer that no overtime work will be permitted, or that overtime work will not be paid for unless authorized in advance, also will not impair the employee's right to compensation for compensable overtime hours that are worked.
Certain state require overtime based on additional work periods as well as after 40 hours in a week that the federal government requires. These states include:
- AK - Overtime after 8 hours in a day. Under a voluntary flexible work hour plan approved by the Alaska Department of Labor, a 10 hour day, 40 hour workweek may be instituted with premium pay after 10 hours a day instead of after 8 hours. The premium overtime pay requirement on either a daily or weekly basis is not applicable to employers of fewer than 4 employees.
- CA - Any work in excess of eight hours in one workday and any work in excess of 40 hours in one workweek and the first eight hours worked on the seventh day of work in any one workweek shall be at the rate of one and one-half times the regular rate of pay. Any work in excess of 12 hours in one day and any work in excess of eight hours on any seventh day of a workweek shall be paid no less than twice the regular rate of pay. Exceptions apply to an employee working pursuant to an alternative workweek adopted pursuant to applicable Labor Code sections and for time spent commuting.
- CO- Overtime after 12 hours in a day.
- CT - In restaurants and hotel restaurants, for the 7th consecutive day of work, premium pay is required at time and one half the minimum rate.
- KY - The 7th day overtime law, which is separate from the minimum wage law differs in coverage from that in the minimum wage law and requires premium pay on the seventh day for those employees who work seven days in any one workweek.
- NV - The premium overtime pay requirement on either a daily or weekly basis is not applicable to employees who are compensated at not less than one and one-half times the minimum rate or to employees of enterprises having a gross annual sales volume of less than $250,000.
- NC - Premium pay is required after 45 hours a week in seasonal amusements or recreational establishments.
- OR - Premium pay required after 10 hours a day in nonfarm canneries, driers, or packing plants and in mills, factories or manufacturing establishments (excluding sawmills, planning mills, shingle mills, and logging camps).
- PR - Double time after 8 hours in a day or 40 hours in a week.
- RI - Time and one-half premium pay for work on Sundays and holidays in retail and certain other businesses is required under two laws that are separate from the minimum wage law.
- VT - The State overtime pay provision has very limited application because it exempts numerous types of establishments, such as retail and service; seasonal amusement/recreation; hotels, motels, restaurants; and transportation employees to whom the Federal (FLSA) overtime provision does not apply.
- VI - Overtime after 8 hours in a day or after 40 hours in a week and on 6th and 7th consecutive days in a week.
- WA - Premium pay not applicable to employees who request compensating time off in lieu of premium pay.
The Act prohibits performance of certain types of work in an employee's home unless the employer has obtained prior certification from the Department of Labor. Restrictions apply in the manufacture of knitted outerwear, gloves and mittens, buttons and buckles, handkerchiefs, embroideries, and jewelry (where safety and health hazards are not involved). Employers wishing to employ homeworkers in these industries are required to provide written assurances to the Department of Labor that they will comply with the Act's wage and hour requirements, among other things.
The Act generally prohibits manufacture of women's apparel (and jewelry under hazardous conditions) in the home except under special certificates that may be issued when the employee cannot adjust to factory work because of age or disability (physical or mental), or must care for a disabled individual in the home.
It is a violation of the Act to fire or in any other manner discriminate against an employee for filing a complaint or for participating in a legal proceeding under the Act.
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