Overtime Pay is Mandatory for Most Wisconsin EmployeesIf Your Employer is Not Paying You Time and a Half for Hours Worked Over 40 Hours/Week, You May Be Entitled to Back-Pay
The Fair Labor Standards Act (FLSA) and Wisconsin Wage and Hour laws require employers pay the majority of employees overtime pay at a rate of one and a half the regular rate for all hours worked over forty hours in a work week. This overtime pay is commonly called “time and a half” because the overtime pay rate equals 1.5x an employee’s regular rate. For example, if an employee’s regular wage is $10.00 and she works 65 hours in a given week, her employer would owe her:
40 x $10 = $400 for the first 40 hours at the regular $10/hour rate, PLUS
25 x $15 = $375 for the remaining 25 hours at the “time and a half” rate of $15/hour
In general, all employees must receive time and a half under both federal and Wisconsin overtime pay laws. However, there are a number of exemptions from overtime pay an employer can use when an employee clearly and unmistakably falls within the classification of an “exempt” employee. Because the overtime exemptions are very narrow, however, employers often misclassify employees and illegally fail to pay them overtime compensation.
Common Examples of Illegal Unpaid Overtime
Employers often violate the overtime requirements by averaging hours worked over two workweeks. When an employee works 45 hours one week, and 35 hours the next, the employee must still be paid time and a half for 5 hours of overtime work in the first week. Overtime pay is calculated on a weekly basis regardless of whether an employer pays on weekly, bi-weekly, or semi-monthly basis.
Employers also break overtime pay laws when they do not include all compensation in the calculation of the regular rate. Shift differentials, nondiscretionary bonuses, promotional bonuses, and the cost of lodging when provided by the employer must all be factored into the regular rate when calculating overtime compensation. An employee who is paid on an hourly basis and is also eligible for commissions or bonuses is entitled to have those commissions or bonuses included in the calculation of their regular rate which increases the overtime pay rate.
Employers also violate the FLSA by providing employees with comp time or compensatory time. Private employers cannot use “comp time” or compensatory time systems where time and a half compensation is replaced by time off in a later workweek. Only governmental employers are allowed to use a comp time system.
Even Salaried Employees May Be Entitled To Overtime Pay
Employees often think that because they are paid a salary, they are not entitled to overtime compensation. However, overtime pay exemptions include both a salary basis test and a duties test, so in addition to being paid a salary, an employee’s actual job duties must meet the narrow exemption. If an employee’s job duties do not meet the exemption’s test, a salaried employee would still be entitled to overtime pay.
For example, Bob is a full-time cashier at a grocery store and is paid a salary of $30,000/year. Bob has no management duties. Even though Bob is paid an annual salary, his job duties do not qualify him as exempt from overtime pay. Even though he makes an annual salary, his employer MUST pay him time and a half for every hour he works over forty hours in a workweek.
Employers often violate the salary basis test by making deductions from an employee’s salary for improper reasons. These reasons include, but are not limited to, partial day absences, absences caused by the employer, or absences due to jury duty.
The White Collar Exemptions
Among the most-often claimed exemptions by employers are the “white collar” exemptions which include the executive exemption, the professional exemption, the administrative exemption, and the computer exemption. Only those employees whose job duties fit these narrow exemptions will be considered exempt from overtime compensation. Below is a brief overview of these overtime pay exemptions; for a detailed explanation, please see What is an Exempt Employee?
The Executive Exemption
The Executive Exemption refers to employees whose primary duty is management of the enterprise or a department of enterprise, who directs the work of two or more full time employees, who can hire and fire other employees, and who is paid on a salary basis of at least $455 a week. Employers regularly misclassify team leads, line supervisors, assistant managers, shift supervisors, and foremen who do not meet each prong of the executive exemption.
The Administrative Exemption
The Administrative Exemption refers to employees whose primary duty is the performance of office or non-manual work directly related to the management or general business operations of the employer and whose primary duty includes the exercise of discretion and independent judgment with respect to matters of significance. Employers regularly misclassify secretaries, paralegals, book keepers, and some human resources employees as administrative employees.
The Professional Exemption
The Professional Exemption refers to two types of professional employees – learned professionals and creative professionals. A learned professional’s primary duty requires the performance of work requiring knowledge of an advanced type in a field of science or learning customarily acquired by a prolonged course of specialized intellectual instruction. A creative professional’s primary duty requires invention, imagination, originality or talent in a recognized field of artistic or creative endeavor. Employers who classify certain types of employees as professionals, no matter how complex the job is, cannot use the exemption where a specific degree or course of education is not required to enter the field of work.
The Computer Exemption
The Computer Exemption refers to employees whose primary duty consists of: the application of system analysis techniques and procedures to determine hardware, software, or system specifications; the design, development, documentation, analysis, creation, testing or modification of computer systems or programs; or the design, documentation, testing, creation or modification of computer programs related to machine operating systems.
The computer exemption does not apply to all IT or information technology staff. Help desk employees who do not meet the above requirements, for example, are not exempt employees.
The Overtime Attorneys at Hawks Quindel Can Help You Get the Overtime Pay You Have Already Earned
The experienced overtime attorneys at Hawks Quindel have assisted thousands of employees in recovering unpaid overtime pay. Whether an employer pays its employees straight time for hours worked over forty or misclassifies its employees under the FLSA, we will fight for your overtime wages. Hawks Quindel’s attorneys are experienced in bringing both individual and class/collective actions for unpaid overtime compensation.
If you think you are owed overtime compensation under state or federal law, Hawks Quindel’s wage and hour team will provide you with a free case evaluation to answer your questions and evaluate your potential claim. Please contact us if you would like to discuss your wages rights under federal FLSA laws. In Madison, call (800) 610-0040 or (608) 257-0040. In Milwaukee, call (800) 236-3348 or (414) 271-8650, or send us an email.