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Understanding the FLSA & Overtime in the Workplace

Posted by Jessica Miller-Merrell

understanding flsa

The Fair Labor Standards Act has tripped up many companies, costing them millions of dollars in overtime claims. Most companies falter because they simply don’t understand the FLSA or they think it doesn’t apply to them because of their size or the number of employees. The only way to be sure to avoid these kinds of lawsuits is to understand all of the basic wage laws.

The Fair Labor Standards Act is the foundation for overtime pay, and understanding it is the first step to take in preventing overtime claims. The FLSA basically states that employees who work more than 40 hours a week are eligible for overtime pay, which should be one and a half times their normal hourly rate. Some employees are exempt from FSLA rules because they are paid on a salary basis rather than an hourly basis. But it also depends on their pay rate and job duties. To determine whether your employees are exempt, see this link to the U.S. Department of Labor site.

Who’s covered by FLSA?

The problem is that some employers assume that since their business is small, they are not affected by the FLSA and don’t have to adhere to its rules. Unlike most other state and federal employment laws, the FLSA does not depend on the number of employees a company has. Instead, it covers individual employees whose work affects interstate commerce. This means that if you do business outside of your home state, no matter how big a company you are, you must follow the Fair Labor Standards Act.

If you routinely order materials or supplies from out-of-state vendors, or if you sell to out-of-state customers, you’re bound by interstate commerce laws. While we could write an entire series on who is covered by the FLSA, today we want to highlight the importance of OT claims, if and when an employee brings a grievance against your company.

The burden of proof is on your employees.

The benefit to a company who has had a grievance filed against it for overtime claims is that the burden of proof is on the employee. This means that employees must have enough evidence to prove that they were working overtime and not getting paid fairly for their time. When timekeeping methods are absent, the employee must prove the precise extent of uncompensated work to the best of their ability.

Legal precedence exists on overtime claims in the workplace.

There are a few prominent cases that set precedence for any claims an employee has against his or her employer. The biggest is the longstanding decision in Anderson v. Mt. Clemens Pottery Company. The U.S. Supreme Court stated in this case that once the employee showed work hours for which they weren’t compensated, it was then the employer’s responsibility to provide evidence to refute it.

At the same time, a case that went through the Eighth Circuit Court of Appeals ruled that any type of sweeping accusations of not being paid a fair wage would generally be thrown out if there is not enough proof to accurately charge the employer with unpaid overtime claims.

The main story behind the FLSA and overtime pay is that companies need to keep very accurate records when it comes to timekeeping, and they need to understand the laws that determine when they need to pay an employee overtime and when they don’t. Doing so will help your company avoid lawsuits, headaches, and spending money on lawyers.

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About Jessica Miller-Merrell

Author

Jessica is listed as the 2nd most influential recruiter online and as the 8th most powerful woman on Twitter. She is the author of Tweet This! Twitter for Business, a how-to business guide for Twitter users. She also writes for a number of leading publications, including Fortune, HR Magazine, SmartBrief, and HR Executive Magazine.

5 COMMENTS Join the discussion
  • Olivia Wilson December, 31, 2014

    Although it is not right, I think that most employees who are forced to work overtime are the immigrants. This category of employees is the one that most often has to work overtime. I think this is due to the fact that these employees do not know enough about the law and do not know their rights. On the other hand, these people are afraid to go to the authorities and denounce their treatment because they risk losing a job and being unable to support their families.

  • Sandra Baker January, 02, 2015

    Overtime or working more than usual is a common practice in some companies. Unfortunately, employees do not have many chances to win that battle with those companies because they risk losing their jobs. Since the effects of the economic crisis are still present, no one is willing to risk running out of a workplace, so all of them accept the fact in silence.

  • Lisa January, 04, 2015

    Unfortunately, there are some employers who exploit their employees, especially if they are in the early stages of their career or really do not know the law and their rights. Also, there are managers who will take advantage of the fact that their employees are in desperate situations and won’t risk losing their job, so they will make them work overtime without the extra pay. There are many such cases where the employees stay silent because they do not have the courage to report these cases.

  • Kelly Peterson January, 06, 2015

    Your article is great, and the final warning is politically correct! But how many people will consider what you wrote? What percentage of American managers complies with the law and respects the rights of their employees? How many of us have had to stay overtime without pay in order to solve a last-minute problem? I will say this: too many! But this is economy, this is life, this is the competition for a place to work. Let’s hope for a better year! All the best for you all!

  • Michael D. Haberman, SPHR January, 06, 2015

    What you failed to point out is that overtime only applies to NONEXEMPT employees. Exempt employees, that is those exempt from being paid overtime, are not covered and can be required to work as many hours as their employer desires.

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Guest January, 06, 2015