Federal law provides under the fair labor standards act (FLSA) that every eligible employee must be paid a minimum wage and overtime pay as applicable. These wage and hour laws apply to staffing services as employers and are enforced through private lawsuits as well as by the Wage and Hour Division of the United States Department of Labor. Major cities across the nation have local Wage and Hour offices of the Labor Department; their addresses and telephone numbers are listed with the United States Government listings in the telephone directories. Since September 1, 1997 the basic minimum wage has been $5.15 an hour, whereas overtime pay is a rate of not less than one and one-half times your regular rate of pay. In other words, if you are paid the minimum wage of $5.15 an hour as your regular pay, then your overtime rate of pay would be $7.73 an hour. If your regular pay is $30 an hour, then your overtime rate of pay would be $45 an hour. Congress is considering amending the overtime pay law to allow employers to provide compensatory time off instead of paying overtime rates. For most professional executive and technical employees, minimum wage will not be an issue, but the subject of overtime pay may come up frequently.
You are entitled to overtime pay for all hours during a workweek that you are required to work in excess of 40 hours per week (unless your employment is exempted from minimum wage and overtime coverage), but you are not entitled by law to time off for holidays like Christmas and Thanksgiving and are not entitled to overtime pay for working holidays unless the hours worked total more than 40 hours for the week.
While federal minimum wage and overtime law (Fair Labor Standards Act or FLSA) does set basic minimum wage and overtime pay standards, there are a number of employment practices that the FLSA does not regulate. For example, the FLSA does not require:
- Vacation, holiday, severance, or sick pay.
- Meal or rest periods, holidays off, or vacations.
- Premium pay for weekend or holiday work.
- Pay raises or fringe benefits.
- A discharge notice, reason for discharge, or immediate payment of final wages to terminated employees.
Who Is Entitled to Minimum Wage and Overtime?
Generally, the federal minimum wage and overtime laws cover any employee of a business that has workers engaged in interstate commerce; any employee of a business that produces or manufactures goods that are then shipped, sold, or distributed in interstate commerce; and any employee of a business that handles, sells, or otherwise deals in goods that have moved in interstate commerce. Almost every staffing service of any appreciable size would be engaged in interstate commerce.
Some categories of employees are exempt from minimum wage and overtime, however. Generally, exempt employees are executive, administrative, and professional employees, as well as outside sales employees, employees in certain computer related occupations, employees of seasonal recreational businesses, and employees of small newspapers. But very few professional temps working through staffing services will meet the regulatory definition of "executive, administrative, or professional." In other words, most professional technical temps will be entitled to overtime pay when they work more than 40 hours in a workweek. Why?
The Department of Labor's definition of "executive, administrative, or professional" for purposes of the minimum wage and over-time law requires certain legal tests to be met. For example, to be exempt as an executive, administrative, or professional employee, the person must be considered a "salaried" employee who is paid full salary every workweek without regard to the number of days or number of hours actually worked. Further, the Department of Labor requires that executive, administrative, and professional exemptions claimed by employers must involve employees who direct or supervise the work of two or more full-time employees, who have the authority to hire and fire on behalf of the employer, who usually have the authority to exercise a high level of independent judgment in their work, and who are not required to devote more than 20% of their time to non management, non professional work. The issues as to whether a particular job is covered by or exempt from overtime pay requirements are complex. As a professional technical temp, if you believe you are entitled to overtime pay and are not receiving such additional compensation, then you should consult with the staffing service about it and with a lawyer or the Department of Labor's Wage and Hour Division, if necessary.
Generally, any employee who is eligible for minimum wage is also entitled to overtime pay; the few exemptions from overtime pay include such workers as commissioned employees of retail establishments; auto, truck, and aircraft sales workers; railroad and air carrier employees; certain media and broadcast business employees; and employees of motion picture theaters. Also, some industries are authorized by law to be partially exempt from overtime pay, such as hospital and healthcare establishments that agree with their employees to organize a 14-day workweek instead of the usual 7-day workweek, as well as partial exemptions for training and study purposes for some employees.
The area where most violations occur usually involves the number of hours worked. For example, David was placed through a staffing service to work as a paralegal in the corporate legal department of a Dlinois textile manufacturing company that produced goods for sale across the nation. David was paid $20 per hour and worked Monday through Friday from 8:00 A.M. to 5:00 P.M., with one hour off for lunch. Often, he was required to sit in on late afternoon meetings and found himself unable to leave until the meeting adjourned, which was seldom before 6:00 P.M. In addition, every other Saturday morning David was asked to come to a sales meeting where cross training techniques were discussed by company supervisors, and occasionally he was required to attend company meetings in the evening where insurance and other benefit programs were explained. Usually, under the federal minimum wage and overtime laws, all of this time must be compensated: An eligible employee must be paid for all hours worked in a workweek, and in general, "hours worked" includes all time an employee is required to be on duty on the employer's premises or at any other prescribed place of work. Also included is any additional time the employee is allowed (i.e., suffered or permitted) to work by the employer.
