Top 5 Misconceptions About Overtime Pay

The payment of overtime is one of the fundamental rights of most workers in the United States. This was established by the Federal Fair Labor Standards Act of 1938 (FLSA). An employee who works more than 40 hours a week is entitled to pay 1.5 times his normal salary for every extra hour worked.

However, despite the fact that the law has been in force for almost 80 years, both employers and employees still have misconceptions. Many do not know everything about their protections. Keep in mind that some employees do not qualify for overtime pay.

One of the consequences is that some employers have taken advantage of this situation. They deny their employees overtime pay. One strategy that employers use is to offer workers positions with exaggerated and inflated names. These are supposedly exempt from overtime pay. This practice, for example, is widely used in the banking industry.

To understand this matter a little more, here are some misconceptions about overtime pay.


1. Professionals do not qualify for overtime pay

Your job position does not determine whether or not you are eligible to receive payment for working overtime. Unless you are paid a certain amount of money, or your rights are defined within certain narrow categories of positions, you must be paid overtime. Employees who earn $455 or more per week and hold a position considered “management” by the FLSA  do not qualify to receive this payment. Some employees, however, are offered positions with inflated titles to exempt them from overtime pay. Although, for the functions they perform, they have the right to receive overtime pay.

For example, some companies in the financial industry hire employees and give them an “analyst” title. Which suggests that they would be exempt from receiving overtime pay. This classification is wrong. Only employees whose jobs involve having people in their care, or making decisions that carry weight within the organization, are those who are exempt from receiving compensation for working overtime.

Obligation of employers: Exemptions are generally defined in a limited manner under the FLSA. Because of this, employers should carefully check the exact terms and conditions of each exemption.


2. Receiving salary means not receiving overtime pay

Generally, workers who receive wages, that is, fixed payments that do not necessarily depend on the fulfillment of a certain number of hours, are exempt from overtime due to their job responsibilities or the amount of money they earn. Not simply because they get paid wages. The FLSA exempts workers currently receiving a salary of $ 455 a week or more. But, every employee who earns less than $ 455 and works more than 40 hours a week is entitled to pay 1.5 times for each additional hour worked.

When an employee is paid a salary, overtime is calculated by converting the salary to its hourly equivalent. Therefore, the overtime rate per paid employee varies depending on the amount paid. The way the salary sum becomes an hourly rate.


3. There are certain extra tasks that are not worth being paid as overtime

According to the FLSA, all work done must be compensated if you are paid by the hour or salary. This includes your full shift time. Including breaks, breaks you take and “non-productive” time, which is the time at work where there is nothing to do. In addition, all the time you spend doing work-related tasks requested by the employer. Whether simple or more complicated, they are also considered under working time.

This means, for example, that if you arrive early to start work, stay late to finish work or work from home, you should be compensated. As long as your employer knows what is being done and allows you to do it. Your employer cannot deny you overtime pay.


4. Payment of overtime can be averaged within two weeks

When extra hours are calculated, they must be counted for the week in which you worked them. The employer’s payment cycle does not matter. If you get paid every two weeks and work 35 hours a week and 45 the other week, your employer cannot average the two weeks together. And so determine that you are not owed overtime. In this case you deserve to receive payment for the extra five hours you worked during the first week.


5. Compensatory free time is acceptable instead of overtime payment

To avoid paying overtime to employees, many employers offer compensatory free time instead of money. This compensation time is an additional rest time offered by employers instead of paying the worker overtime.

There are cases in which free compensatory time is accepted instead of money. For example, if in one week you were scheduled to work 38 hours and work 40, the two hours of extra work are not counted as overtime. Although, in this case the free compensation time can be given as an additional compensation.

If you suspect or think you have been denied payment for the extra time you worked due to any misinterpretation of the law by your employer, you have the right to recover your lost salary. Many times we are afraid of losing our job and do not file a complaint with this kind of unfair situation. Know that employees are protected by the FLSA against retaliation.