Atlanta Employment Attorneys BlogWhile 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.
Articles Posted in Unpaid Overtime
Overtime and the Fluctuating Workweek
Under the Fair Labor Standards Act, nonexempt employees are entitled to overtime at a rate of one and one-half times their regular hourly rate for hours worked in excess of 40 per week. However, it is possible for a nonexempt employee to be paid on a “salary” basis, in which case the employee may receive only one-half times the regular rate for hours worked in excess of 40 per week. This method is called the “fluctuating workweek” (or “flex-pay”) method of calculating overtime (though sometimes it is unfortunately referred to as “Chinese Overtime”). The premise of flex-pay is fairly straightforward: because a nonexempt employee received a salary as compensation for all hours worked, the employee has already been paid all wages at the regular rate for all hours worked, including hours worked over 40. Accordingly, only the additional half-time overtime rate is owed for hours worked over 40. Flex-pay gets its name(s) because, when an employee is paid on a salary basis, the regular rate will fluctuate based on the number of hours worked. Notably, the more hours an employee works, the lower the regular rate (and the overtime rate) will go. Consider the following examples:
Salaried employees don’t get overtime, right?
It is a common misconception among employers that simply paying a salary avoids the burden of paying overtime wages. Failing to properly classify salaried employees can have devastating consequences, including liability for unpaid overtime wages for highly compensated employees who routinely work well over 40 hours per week.