Can a Company Not Pay Overtime?
The Fair Labor Standards Act (FLSA) is the federal law that sets minimum wage and overtime standards and protects workers in the United States from being exploited by their employers. This law applies to virtually every company in the United States, but not all.
In general, the FLSA applies to any company with annual sales of at least $500,000 or whose business involves interstate commerce, which includes communicating with people in other states, traveling to other states for business, and/or the transfer of goods from one state to another.
Under the FLSA, certain employees must be paid overtime pay for hours worked in excess of 40 in any given work week. Overtime is to be paid at a rate of 1.5 times the employees regular rate of pay. So, if an employee is regularly paid $10/hours, then for all hour worked in excess of 40 in a given work week, he or she must be paid at a rate of $15/hour.
Can You Be Denied Overtime?
Whether a company can deny you overtime or not depends on whether you are classified as exempt or non-exempt under the FLSA.
Non-exempt employees are generally paid on an hourly basis and have little or no supervisory authority or independent discretion. If you are classified as non-exempt, your company must pay you overtime at a rate of 1.5 times your regular rate of pay.
On the other hand, if you are an exempt employee, your company does not have to pay you overtime. The FLSA overtime rules do not apply to exempt employees.
Examples of exempt employees include:
- Executive, professional, administrative, and highly compensated employees
- Outside sales personnel
- Employees in certain computer-related occupations
- Certain commissioned employees in retail or service industries
Whether you should rightfully be classified as an exempt or non-exempt employee can be difficult to determine and there are many factors that must be considered, most notably:
- Whether or not you are paid on a salary basis. Hourly employees are non-exempt under the FLSA
- How much salary you receive. The minimum salary requirement for exempt status is $913/week
- Whether or not your primary job duties qualify you for exempt status under the FLSA. Your primary job duties must generally be of an executive, administrative, or professional nature.
To find out how you should be classified under FLSA regulations, and whether or not your company can not pay you overtime, you should consult with an experienced employment law attorney regarding the particulars of your employment arrangement.