Overtime, an Introduction

We started talking about overtime, at least for just a second, in the very first substantive post in this series.  Remember:

Section 7 of the FLSA, 29 USC §207 says:

(1) Except as otherwise provided in this section, no employer shall employ any of his employees who in any workweek is engaged in commerce or in the production of goods for commerce, or is employed in an enterprise engaged in commerce or in the production of goods for commerce, for a workweek longer than forty hours unless such employee receives compensation for his employment in excess of the hours above specified at a rate not less than one and one-half times the regular rate at which he is employed.  The amount of money an employee should receive cannot be determined without knowing the number of hours worked. . . .

And again, like it has over and over during this series, this general rule raises a whole bunch of questions.  We have already talked about the employer and the employee and employ and that stuff.  Now we are going to talk about the workweek and the regular rate which are the basis for how you have to pay overtime.  Some preliminary stuff first.  The first 7 regulations under this part deal with general stuff and interpretations and the interrelationship between the FLSA and some other laws, and we are only going to talk one of these regulations.  That is 29 CFR § 778.5 which is entitled “Relation to other laws generally.”  This section says:

Various Federal, State, and local laws require the payment of minimum hourly, daily or weekly wages different from the minimum set forth in the Fair Labor Standards Act, and the payment of overtime compensation computed on bases different from those set forth in the Fair Labor Standards Act.  Where such legislation is applicable and does not contravene the requirements of the Fair Labor Standards Act, nothing in the act, the regulations or the interpretations announced by the Administrator should be taken to override or nullify the provisions of these laws.  Compliance with other applicable legislation does not excuse noncompliance with the Fair Labor Standards Act.  Where a higher minimum wage than that set in the Fair Labor Standards Act is applicable to an employee by virtue of such other legislation, the regular rate of the employee, as the term is used in the Fair Labor Standards Act, cannot be lower than such applicable minimum, for the words “regular rate at which he is employed” as used in section 7 must be construed to mean the regular rate at which he is lawfully employed.

And there are some important concepts in this little section of the regulations.  One, we have already talked about when we were discussing the minimum wage.  If there is a state law that provides for a higher minimum wage, you pay the higher minimum wage.  Same thing applies when we talk about overtime.  You see, the basis for paying overtime is the employee’s “Regular Rate.”  And as you can see above:

Where a higher minimum wage than that set in the Fair Labor Standards Act is applicable to an employee by virtue of such other legislation, the regular rate of the employee, as the term is used in the Fair Labor Standards Act, cannot be lower than such applicable minimum, for the words “regular rate at which he is employed” as used in section 7 must be construed to mean the regular rate at which he is lawfully employed.

Id. (emphasis added).

So don’t forget as we go along, and I am reasonably sure I have said this in other posts, whenever there is a state law that provides the employees with more protection than the federal law does, you apply the state law to that particular issue.  Our friends in California, this is especially important for you!

Now let’s talk a bit about the maximum hour provisions.  According to 29 CFR § 100:

Section 7(a) of the Act deals with maximum hours and overtime compensation for employees who are within the general coverage of the Act and are not specifically exempt from its overtime pay requirements.  It prescribes the maximum weekly hours of work permitted for the employment of such employees in any workweek without extra compensation for overtime, and a general overtime rate of pay not less than one and one-half times the employee’s regular rate which the employee must receive for all hours worked in any workweek in excess of the applicable maximum hours.  The employment by an employer of an employee in any work subject to the Act in any workweek brings these provisions into operation.  The employer is prohibited from employing the employee in excess of the prescribed maximum hours in such workweek without paying him the required extra compensation for the overtime hours worked at a rate meeting the statutory requirement.

 Id. (emphasis added).

So what is the prescribed maximum?  Well, section 7 of the Act above says 40 hours in a workweek and so do the regs.  29 CFR § 101 says:

As a general standard, section 7(a) of the Act provides 40 hours as the maximum number that an employee subject to its provisions may work for an employer in any workweek without receiving additional compensation at not less than the statutory rate for overtime.  Hours worked in excess of the statutory maximum in any workweek are overtime hours under the statute; a workweek no longer than the prescribed maximum is a non-overtime workweek under the Act, to which the pay requirements of section 6 (minimum wage and equal pay) but not those of section 7(a) are applicable.

So let’s get one thing out of the way right now.  Nothing in the Act sets a maximum on the number of hours you can work your employees in a workweek.  As long as the employee is 18 years old or older, work them 100 hours in the week if you want.  But, unless they are exempt under one of the exemptions we will talk about in the coming weeks, you have to pay them overtime.  And in this case overtime is time and one-half of the regular rate.  Not double time, time and one-half.  Now, and I said this when we started today and I said it when we were talking about breaks and I’m going to say it again, LOOK OUT FOR STATE LAWS, they may provide more protection.  And, go ahead and work your employees this hard and see how long they stay your employees.  I’m just sayin’.  And there is a reg that even says that:

Since there is no absolute limitation in the Act (apart from the child labor provisions and regulations thereunder) on the number of hours that an employee may work in any workweek, he may work as many hours a week as he and his employer see fit, so long as the required overtime compensation is paid him for hours worked in excess of the maximum workweek prescribed by section 7(a). The Act does not generally require, however, that an employee be paid overtime compensation for hours in excess of eight per day, or for work on Saturdays, Sundays, holidays or regular days of rest.  If no more than the maximum number of hours prescribed in the Act are actually worked in the workweek, overtime compensation pursuant to section 7(a) need not be paid.  Nothing in the Act, however, will relieve an employer of any obligation he may have assumed by contract or of any obligation imposed by other Federal or State law to limit overtime hours of work or to pay premium rates for work in excess of a daily standard or for work on Saturdays, Sundays, holidays, or other periods outside of or in excess of the normal or regular workweek or workday.  (The effect of making such payments is discussed in §§778.201 through 778.207 and 778.219.)

29 CFR § 778.102.

And doesn’t that make some important points:  Under the FLSA overtime is based on 40 hours in the workweek.  Not 8 hours in a day or Saturday or Sunday work or working on holidays.  If you do any of those, good for you, but it is extra under the FLSA.  You get to take credit for it, but it is extra. (don’t forget state law . . . . again.)

Next week, we talk about the workweek.