Employee wages, including overtime payments, are complex issues governed by both federal and state legislation. In 2004 the Department of Labor (DOL) made changes to the Fair Labor Standards Act (FLSA). This marked the first major overhaul of the federal overtime law in over 50 years, and the changes have made overtime pay regulations even more complicated. Generally, when employers hire an employee they are classified by job as either "exempt", those not eligible for overtime payments, or "non-exempt", those eligible and entitled to receive overtime payments.

Wage and hour violations are the most frequent workplace violations. These violations include employers who have systematically failed to pay overtime to hundreds or even thousands of employees, smaller and less-sophisticated companies who are not fully aware of the federal overtime laws, employers who mistakenly fail to pay overtime because they assume an employee is exempt and others whose intention it is to purposely cheat workers of overtime payments.

Since the legislative changes there have been large numbers of cases addressing these issues. Some of the most notable include Starbucks, Wal-Mart and Radio Shack. Since overtime violations generally involve large groups and have become more prevalent since the laws were changed, companies of all sizes are starting to make a number of efforts to ensure compliance. This includes knowing all of the regulatory bodies that govern these laws.

The FSLA establishes the hourly minimum wage, overtime pay rules, recordkeeping, and child labor standards affecting all full-time and part-time workers in the private sector and in some branches of the government. The exact amount of the minimum wage paid to workers increases periodically.

The Employment Standards Administration’s Wage and Hour Division (WHD) is the government entity responsible for administering and enforcing labor laws, including the minimum wage and overtime provisions of the Fair Labor Standards Act (FLSA), the Family and Medical Leave Act (FMLA) and other employee guidelines.

Overtime Rules

Unless specifically exempted, hourly employees must receive overtime pay for hours worked in excess of forty hours in a work week at a rate not less than time and one-half of their regular rates of pay. The number of hours an employee works in a single workweek, for those aged 16 and older, is unrestricted. There are not any requirements for overtime payments to employees who work on Saturdays, Sundays, holidays, or days of rest. In addition, an employee's workweek must be a fixed and regularly recurring period of 168 hours (seven consecutive 24-hour periods). The workweek does not need to coincide with the calendar week and different workweeks may be established for different employees or groups of employees. However, once an employee's workweek has been established, it should remain fixed, regardless of the schedule of hours worked. The employer may adjust the start of the workweek if the change is intended to be permanent and is not designed to evade the overtime payments to the employee.

Employers are also not allowed to average hours over two or more weeks. This rule applies regardless of whether the employee works on a standard or swing shift schedule and regardless of whether payment is on a daily, weekly, biweekly, monthly or other basis. In addition overtime pay earned in a particular workweek should be paid on the regular payday for the pay period in which the wages were earned.

Pay Rate Calculations

The regular rate of pay for an employee cannot be less than the legally established minimum wage. This regular rate must include all remuneration for employment with the exception of certain types of payments, including reimbursements for expenses incurred on the employer's behalf, premium payments, discretionary bonuses, gifts and payments ig the nature of gifts on special occasions are not part of the regular rate. In addition, payment for time not worked, such as for vacations, personal days or illness, should not be included regular pay rate calculations.

Two Rates of Pay

If an employee works at two or more different types of jobs for which different rates have been established, the regular rate for that week should be calculated as the weighted average of the rates. The earnings from all of the job rates need to be added and the total divided by the number of hours worked at all jobs to ascertain the regular rate.

Violations

Violations for failure to pay overtime, the incorrect classification of employee groups as exempt or non-exempt, long delays of overtime payments and other employee wage issues are rampant. In 2005 the Employment Standards Administration’s Wage and Hour Division recovered more than $166 million in back wages for over 241,000 employees. The agency also conducted 34,858 compliance actions in 2005 and assessed over $10.5 million in civil money. Violations of federal overtime rules nearly 100% increase for white-collar workers increased in the last four years, from 73 in 2000 to 138 in 2004.

An employee should seek legal advice if they have an indication that are entitled to receive overtime payments and they are not being paid overtime payments from their employer. Lawyers who specialize in this area can help an individual begin to collect payments, and to receive any past payments owed, if it is determined the employer is in violation of the overtime payment regulations.