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Waiving Overtime Rights

While a 40 hour workweek is considered standard practice in the United States, many employees often go above and beyond the call of duty in an effort to meet deadlines, make a positive impression, or get ahead. According to the Fair Labor Standards Act (FLSA), employers are obligated to provide overtime pay for employees that work an excess of 40 hours in a workweek. This right to overtime pay cannot be waived through any announcement made by the employer or by any agreement made between the employer and employee.

For hourly employees, overtime pay is calculated at a rate of time and one-half the regular pay rate. This regular pay rate cannot be less than the current minimum wage and excludes all discretionary bonuses, expenses undertaken on the employer’s behalf, and gifts. In addition, the overtime pay rate does not apply to hours labored outside of the workweek, such as Saturdays, Sundays, and holidays.

There is no minimum or maximum number of overtime hours that an employee can work during any workweek as long as the employee is over 16 years of age. Hours worked over a period of two or more weeks cannot be averaged together. General practice is to pay employees for overtime work at the end of the pay period in which additional services were rendered and on the regularly scheduled pay day.

Overtime pay also applies to non-hourly employees, such as those paid on commission, piece-rate, or salary. In these cases, overtime pay is determined by dividing the total pay for employment in any workweek by the total hours actually worked by the employee. The total pay is subject to the same exclusions noted above in regards to hourly employees. For employees that work multiple jobs with differing straight-time rates in the same workweek, the regular pay rate can be determined from the weighted average of all rates.

A number of problems are associated with overtime pay. For example, employers can often forget to include certain payments in an employee’s hourly rate, such as nondiscretionary bonuses, leading to underpayment for overtime hours. Additionally, employees that are hired to work an excess of 40 hours a week are often paid overtime based on the 40 hour criteria rather than the amount of hours that they were hired on to work, resulting again in underpayment for overtime.

If you feel as though one of these situations applies to you, or if you have any questions regarding overtime wages or employment law, please feel free to contact us here. Further information on overtime pay requirements under the FLSA can be found here.