The most common errors in overtime pay emerge from employee misclassification, overlooking hours worked, and inaccurate calculation of hourly wages. Florida follows the Federal Labor Standards Act (FLSA) to determine overtime pay. The FLSA does not limit the number of hours an employee can work in a week. However, it dictates when some employees must receive overtime pay. Although Florida law limits a workday to ten hours, this only applies to non-hourly workers. A federal court has also deemed this law “impermissibly vague.”
Employee Classification
The FLSA overtime rules apply only to covered employers[1] and covered employees who are non-exempt.[2] For FLSA covered employers, after 40 hours of work in a week, non-exempt employees must be paid overtime rates amounting to time-and-one-half for every hour worked over 40.
Hours Worked
The FLSA defines the term “employ” to include the term “suffer or permit to work.” This term means that if an employer covered by FLSA requires or allows employees to work, the time spent is generally “hours worked,”[3] for which overtime must be paid if an employee is non-exempt. This includes work performed “off-the-clock.”
Off-the-clock work occurs when an employee continues to work at the end of regular working hours for various reasons, for example, to finish an assigned task, prepare reports, finish waiting on a customer, take care of a patient in an emergency, or brings work home to complete in the evening or on weekends to meet a deadline. Off-the-clock work is “hours worked” under the FLSA and falls under the overtime pay requirements for covered employees.
Calculating Overtime
Overtime is calculated based on how the employee is paid, whether hourly, by piece produced, or by salary. For example, for hourly employees, overtime must be paid at a rate of at least one and one-half times the employee’s regular pay rate for each hour worked in a workweek in excess of the maximum allowable (e.g., 40 hours). Subject to statutory exclusions, the regular pay rate includes all payments an employer has made to (or on behalf of) the employee. Also, the regular rate may not be less than the minimum wage[4] required by the FLSA.
Comp Time
Under the FLSA, it is generally illegal to give non-exempt employees “comp time” or time off work in lieu of paying them overtime. This is because of its potential for abuse. However, government employees can be offered comp time instead of overtime pay under very specific conditions (e.g., arranged ahead of time, pre-negotiated with union, “redeemed” within the same pay period, calculated at one-and-a-half rate.)
When giving exempt employees comp time, an employer must be careful, as this practice may trigger liability for discriminatory practices if the employer does not offer the benefit to all employees, equally. In addition, granting comp time to exempt employees could be perceived as treating the exempt employees as non-exempt.
Overtime under Florida Law
Section 448.01, Florida Statutes (1997) states that when any person employed to perform manual labor of any kind by the day, week, month or year works 10 hours in a day, this amounts to a legal day’s work, unless otherwise specified in a written contract signed by the employee and employer.
However, the statute is limited to non-hourly workers. In the 2002 case of Quaker Oats Company v. Jewell, nine hourly employees brought an overtime claim against their employer, citing binding language in the employee handbook. The Court of Appeal of Florida, Fifth District, denied their claim, stating that the statute does not apply to hourly employees and those who are not employed by the day, week, month or year. In addition, the court stated that a strong argument could be made that the statute was “impermissibly vague” because the terms “manual labor” and “extra pay” are not clearly defined in the statute, and that the statute needed to be clarified by the Florida legislature.
Best Practices
For employers, defending an overtime pay claim[5] can be a complex and costly process. Employers can greatly benefit from assistance of knowledgeable legal counsel to prevent and manage liability, or in cases where the employer must mitigate liability when facing an administrative claim or a lawsuit. Engaging knowledgeable legal counsel as early in the process as possible is key, particularly in light of the expected increase in overtime claims if the new FLSA salary threshold for exempt employees is implemented later this year.
Knowledgeable counsel can also provide assistance to employees throughout the claim process, including the strategic selection and preservation of the evidence necessary to support an overtime claim, which is often accompanied by other violations, such as minimum wage, discrimination, and breach of contract.
Whether you are an employer, employee, or independent contractor, the Orlando employment law attorneys of Burruezo & Burruezo can assist you in assessing an overtime pay situation and offer competent legal representation, if necessary. Click here to contact an attorney now.
[1] See FLSA Enterprise and Individual Coverage blog article for more detail on what employers and employees are covered by the FLSA for overtime pay.
[2] See Exempt or Non-Exempt? Employee Classification Under FLSA blog article for more information. A proposed rule will raise the threshold for exempt employee classification (from $455 to $970 a week) by the end of 2016, opening the door to an increased amount of overtime claims.
[3] See Hours Worked blog article for additional information of what time qualifies as hours worked.
[4] See Minimum Wage blog article for additional detail.
[5] See Wage and Hour Claims blog article for more information about filing and defending a claim, as well as damages and penalties associated with violations.