Federal and state laws require most employers to pay overtime. An employee who works overtime must be paid “time and half” for every hour of overtime worked. For example, an employee who earns $20 an hour would be entitled to $30 an hour for overtime.
Many employers try to avoid paying overtime to employees who are entitled to overtime by calling them “exempt” and paying them salaries and/or commissions rather than strictly by the hour. If a “non-exempt” employee has been mischaracterized by her employer as “exempt,” she may be entitled to recover damages from her employer for the unpaid compensation she has earned regardless of whether she was hourly or salaried, with or without commission.
If an employee is entitled to overtime, her employer must pay her for any overtime hours the employer “suffered or permitted” her to work. This includes not only overtime the employee was required or requested to work but also overtime the employee worked that the employer knew or should have known about. For example, an employee who is required to “clock out” before cleaning the store at night is entitled to pay for cleaning time. Similarly, an employee who regularly receives work-related e-mail and phone calls in the evening and on weekends is entitled to compensation for that time. Many employers issue policies stating that overtime work is prohibited without permission and that unauthorized overtime will not be paid. However, an employer may have to pay for unauthorized overtime if the employer knew or should have known about the work and still permitted it.
The overtime requirement of the federal Fair Labor Standards Act (“FLSA)” cannot be waived by either the employer or an employee. Even if an employee and her employer entered into an agreement that she would be paid a certain way – for example, salaried exempt – but her pay structure and job responsibilities actually do not fit within any of the exemptions in the overtime laws, she may be entitled to recover overtime pay for overtime hours worked.
In addition, an employer is obligated by the FLSA to maintain records of the time its employees spend performing compensable work activities. If an employee brings an overtime claim against her employer but the employer has failed to maintain the required records, the employee is entitled to recover overtime pay based on a good faith estimate of the time she worked for that employer over the past two to three years.