TT&S Weekly (9/30/19)
Topic of the Week Overtime Pay
- Which federal law(s) cover payment of overtime?
- Who is covered by overtime laws?
- Which employers are covered by the law?
- My employer is covered by the FLSA. Does this mean I am eligible for overtime?
Which federal law(s) cover payment of overtime?
The federal overtime provisions are contained in the Fair Labor Standards Act (FLSA). Some states also have overtime laws.
Who is covered by overtime laws?
More than eighty million American workers are protected (or "covered") by the FLSA; however, not all of these workers are eligible for overtime. The first step in determining whether you are eligible for overtime is to determine whether your employer is covered by the FLSA. There are two ways in which an employee can be covered: "enterprise coverage" and "individual coverage." Either standard is sufficient for the employer to be subject to the FLSA's overtime provisions.
Enterprise coverage: Employees who work for certain businesses or organizations (or "enterprises") are covered by the FLSA. These enterprises, which must have at least two employees, are:
those which do at least $500,000 a year in business; or
hospitals, businesses providing medical or nursing care for residents, schools and preschools, and government agencies
Individual coverage: Even when there is no enterprise coverage, employees are protected by the FLSA if their work regularly involves them in commerce between states ("interstate commerce"). In its own words, the law covers individual workers who are "engaged in commerce or in the production of goods for commerce."
Examples of employees who are involved in interstate commerce include those who: produce goods (such as a worker assembling components in a factory or a secretary typing letters in an office) that will be sent out of state, regularly make telephone calls to persons located in other States, handle records of interstate transactions, travel to other States on their jobs, and do janitorial work in buildings where goods are produced for shipment outside the State.
Domestic service workers (such as housekeepers, full-time babysitters, chauffeurs and cooks) are normally covered by the law, as long as:
their cash wages from one employer are at least $1,000 in a calendar year (or the amount designated pursuant to an adjustment provision in the Internal Revenue Code), or
they work a total of more than 8 hours a week for one or more employers.
Construction Activities: Employees of construction firms may be subject to the FLSA when they work on certain types of projects. To determine if you are covered in these situations, you must analyze the character of the construction project. The FLSA covers construction work in or on a channel or facility of interstate commerce (i.e. highway, telephone lines, etc). The FLSA also covers construction work which is closely tied with the process of producing goods for interstate commerce, for example, construction which improves, replaces, or expands a covered production facility that ships its products across state lines. Covered construction activity includes:
(1) Repair, maintenance, and construction of instrumentalities of interstate commerce. An instrumentality of interstate commerce includes railroads, highways and city streets, pipe lines, telephone and/or electrical transmission lines, airports, bus/truck/steamship terminals, radio or TV stations and river/streams/waterways over which interstate or foreign commerce regularly moves.
(2) Repair, maintenance, reconstruction, redesign, improvement or extension or enlargement of an existing facility engaged in the production of goods for interstate commerce. The construction of a new production facility would not be a covered project.
An employee working on projects such as these is considered to be essential to interstate commerce or the production of goods for interstate commerce.
Which employers are covered by the law?
Employers whose enterprises are covered by the FLSA, or who have employees engaged in interstate commerce are required by the FLSA to pay overtime to eligible employees. Unlike some other laws relating to employment, the standard does not hinge upon how many employees the employer has, but instead looks at the nature of the work performed by the enterprise and the employee to determine whether interstate commerce is involved. For more information, please see the previous question.
My employer is covered by the FLSA. Does this mean I am eligible for overtime?
Not necessarily. First, the type of job you do may be one that is specifically excluded from protection under the FLSA or its overtime provisions. Second, if you are paid a salary and perform the duties of an exempt employee, you will not be eligible for overtime.
