What is the federal minimum wage?
Under the Fair Labor Standards Act (FLSA), commonly known as the “overtime law”, the federal minimum wage for a covered nonexempt employee is $7.25 per hour effective July 24, 2009. There are many types of exempt or non-overtime employment. For example, most employees of airlines such as pilots and line mechanics do not fall within the Fair Labor Standards Act’s overtime rules. Farm workers, executives, and certain commissioned sales employees are also exempt from the overtime provisions of the Fair Labor Standards Act.
What is the overtime rate?
The Fair Labor Standards Act (FLSA) requires that covered non-exempt employees receive at least the minimum wage, and at least one and one-half times their regular rates of pay (overtime) for hours worked over 40 in a workweek. In general, “hours worked” includes all time where an employee is required to be on duty, on the employer’s premises, or at any other prescribed place of work.
How do you calculate Hours Worked and Overtime?
A workday means the period on any particular day when an employee commences his or her principal activity and the time when he or she completes the activity. A workday can be longer than the employee’s scheduled shift, which may trigger overtime. Rest periods of short duration, usually 20 minutes or less, are customarily paid for as working time. These rest periods must be included in employees hours worked for the day or week. Further, time for eating lunch or other meals of less than 30 minutes are not work time. However, the employee must not be required to do anything related to his or her job during that period of time.
An example on how to calculate overtime hours is as follows, assume an employee is paid $8.00 dollars an hour and works 44 hours in a workweek. The employee works four hours of overtime. The employee is entitled to receive $12 an hour for the four hours he or she worked over the standard 40-hour workweek. The employee would receive $320 for the first 40 hours of work plus at a rate of $8.00 per hour, and an additional $48 for the four hours of overtime for a total of $368.
Who is required to maintain records of wages paid and hours worked?
The Fair Labor Standards Act and overtime laws require employers to keep records on the wages paid, hours worked, and any hours paid to each employee. There is no exact form these records need to be maintained in; however, the following must be maintained by the employer:
- Personal information, including employee’s name, home address, occupation and sex;
- The employer must keep records regarding the number of hours and days when an employee worked
- Separate from the overtime earned, the employer must keep track of the total regular time earned by an employee and the regular hourly pay rate for any week when overtime was earned by the employee
- Lastly, the employer must keep track of all overtime hours and rate of pay for the hours worked.
In many overtime cases the employer has not maintained these required records.
What can an employee do if he or she has not been paid overtime?
An employee who has not been paid overtime benefits may file a lawsuit, typically filed in the Federal District Court, for back pay including overtime. The law also provides for the employee to recover attorney’s fees and court costs.
How long does and employee have to file a lawsuit for overtime benefits?
The overtime law has a two-year statute of limitations for the recovery of back pay. The Fair Labor Standards Act, or overtime statute, does have a three-year statute of limitations in situations where it can be established that the employer willfully violated the statute by failing to pay an employee overtime pay.
Employment Practices which the FLSA (overtime law) does not regulate.
The Fair Labor Standards (overtime law) does not regulate vacation, holiday, severance or sick pay. Likewise, the overtime law does not regulate pay raises or other fringe benefits. Nor are vacations, holidays, rest periods, or meals governed by the Fair Labor Standards Act.
To whom does the minimum wage apply?
The overtime and minimum wage law applies to employees of companies or businesses that have annual gross of at least $500,000. It also applies to employees of smaller businesses or companies if the employee engages in interstate commerce or in the production of goods for commerce such as employees who work in transportation, communications, or who regularly use mail or telephones for interstate communications. The law also applies to employees of federal, state, or local government agencies, hospitals and schools.
What is the minimum wage for workers who receive tips?
An employer may pay a tipped employee not less than $2.13 an hour in direct wages if that amount plus the tips received equal at least the federal minimum wage, the employee retains all tips and the employee customarily and regularly receives more than $30 a month in tips. If an employee’s tips combined with the employer’s direct wages of at least $2.13 an hour do not equal the federal minimum hourly wage, the employer must make up the difference.
Must young workers be paid the minimum wage?
A minimum wage of $4.25 per hour applies to young workers under the age of 20 during their first 90 consecutive calendar days of employment with an employer, as long as their work does not displace other workers. After 90 consecutive days of employment or the employee reaches 20 years of age, whichever comes first, the employee must receive a minimum wage of $7.25 per hour effective July 24, 2009.
What minimum wage exceptions apply to full-time students?
The Full-time Student Program is for full-time students employed in retail or service stores or colleges and universities. An employer that hires students can obtain a certificate from the Department of Labor which allows the student to be paid not less than 85% of the minimum wage. The certificate also limits the hours that the student may work to 8 hours in a day and no more than 20 hours a week when school is in session and 40 hours when school is out, and requires the employer to follow all child labor laws. Once students graduate or leave school for good, they must be paid $7.25 per hour effective July 24, 2009.
How often does the federal minimum wage increase?
The current $7.25 minimum wage does not increase automatically. The United States Congress must pass a bill which the President signs into law in order for the minimum wage to go up.
What happens if state law requires payment of a higher minimum wage than federal law?
Where state law requires a higher minimum wage, that higher standard applies. Some states have enacted statutes requiring a minimum wage above the minimum wage set by the Federal government.