Overtime & Minimum Wage
The Fair Labor Standards Act
Congress enacted the Fair Labor Standards Act ("FLSA"), 29 U.S.C. § 201 et seq. in 1938 as a statute "designed to correct 'labor conditions detrimental to the maintenance of the minimum standard of living necessary for health, efficiency, and general well-being of workers . . . .'" Dunlop v. Carriage Carpet Co., 548 F.2d 139, 143 (6th Cir. 1977) (quoting 29 U.S.C. § 202(a)). The FLSA establishes minimum wage, overtime pay, recordkeeping, and youth employment standards affecting employees in the private sector and in Federal, State, and local governments.
The FLSA provides that employers may not require employees to work more than forty hours per workweek unless those employees receive overtime compensation at a rate of not less than one-and-one-half times their regular pay. The FLSA contains certain exemptions from the overtime compensation requirement; however, "[e]xemptions under the FLSA are narrowly construed against the employer." Takacs v. Hahn Auto. Corp., 246 F.3d 776, 779 (6th Cir. 2001). There is no limit on the number of hours employees who are sixteen years or older may work in any given work week. In addition, the FLSA does not require overtime pay for work on weekends, holidays, or regular days of rest, unless overtime is worked on such days.
The FLSA applies on a workweek basis. 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. Normally, overtime pay earned in a particular workweek must be paid on the regular pay day for the pay period in which the wages were earned.
There are four exceptions to the overtime law. Three exceptions that apply to employees in the private sector involve payment of overtime pursuant to a "Belo-type" guarantee wage plan, the rate applicable to the type of work performed during non-overtime hours, or a rate established as the overtime rate by agreement or understanding.
The FSLA requires employers to pay employees covered by the FSLA who are not specifically exempt the statutory minimum wage. While the minimum wage has changed over the years, covered nonexempt workers are entitled to a minimum wage of at least $6.55 per hour effective July 24, 2008; and $7.25 per hour effective July 24, 2009. Although many states also have minimum wage laws, in cases where an employee is subject to both state and federal minimum wage laws, the employee is entitled to the higher minimum wage.
Even though the statutory minimum is set forth as an hourly rate, this does not mean wage payments cannot be made on a salary, commission, monthly, piecework or other basis. However, the wages paid must equal or exceed the minimum wage.
[Sources for the above include caselaw, Unites States Department of Labor's website and Laurie Leader, Wages and Hours Law and Practice (2008)].
The Bernard Law Firm
Dale A. Bernard, Attorney at Law