Overtime Pay: Eligibility, Calculation, and Common Violations

By Douglas Lipsky

Understanding overtime pay is crucial for employees in New York City, where the work culture often demands long hours. Being informed about overtime regulations is not just a matter of financial compensation but also a significant aspect of workplace rights and fairness.

However, not all employees are aware of these rights, and some employers may intentionally or unintentionally fail to adhere to these laws. This is where an employment lawyer can be a powerful ally for employees. Let’s take a look at common overtime pay violations and how to protect your rights.

Understanding Overtime Pay

Overtime pay is additional money that employees earn when they work more than the standard 40 hours in a workweek. It’s usually calculated at one and a half times the regular hourly rate for every hour worked over 40. In the United States, overtime pay is governed by the Fair Labor Standards Act (FLSA), which sets the federal standard for wages and work hours. The New York State Labor Law complements the FLSA, mandating that employees be compensated for overtime.

Eligibility depends on whether an employee is classified as “exempt” or “non-exempt.” Exempt employees, typically those in executive, professional, or administrative roles, and who meet certain salary thresholds, are not entitled to overtime pay under the FLSA. Non-exempt employees, on the other hand, are eligible for overtime pay. Both employers and employees need to understand these classifications to ensure compliance with the law and fair compensation.

How to Calculate Overtime Pay

Calculating overtime pay is essential for both employers and employees to ensure fair compensation for extra hours worked. The formula for calculating overtime pay is relatively straightforward and is a crucial aspect of understanding one’s earnings:

  • Determine the regular hourly rate – To calculate overtime pay, you first need to know your regular hourly rate. This is typically your standard rate of pay for the hours worked up to 40 hours in a workweek.
  • Identify the overtime hours – Overtime pay comes into play when you work more than 40 hours in a workweek. Identify the number of hours worked beyond the 40-hour threshold.
  • Calculate overtime – Multiply the number of overtime hours by one and a half times your regular hourly rate. The result is your overtime pay for those extra hours.

For example, if your regular hourly rate is $20, and you worked 45 hours in a week, you would calculate your overtime pay as follows: (45 – 40) hours * ($20 * 1.5) = 5 hours * $30 = $150 in overtime pay.

Employees need to understand the applicable regulations and their employer’s policies concerning overtime pay to ensure they receive fair compensation for their hard work. 

Common Overtime Violations

Employers are legally obligated to pay their employees fairly for overtime work, but unfortunately, there are instances where these rights are violated. Here are some common overtime violations that employees should be aware of:

  • Employee misclassification  – misclassifying employees as “exempt” when they should be “non-exempt,” exempting them from overtime pay. 
  • Off-the-clock work – requiring employees to perform job-related tasks off the clock, such as answering emails or completing paperwork outside of regular working hours. 
  • Failure to count all hours worked – overlooking certain hours worked, such as time spent on mandatory training or waiting for work assignments to begin.
  • Illegal overtime agreements – pressuring employees into agreeing to illegal overtime arrangements, such as not paying overtime until after 80 hours worked in a two-week period.
  • Manipulation of overtime calculations – manipulating overtime calculations by averaging hours over multiple weeks, resulting in lower overtime pay. This practice is illegal and can significantly impact an employee’s earnings.

These common violations not only deprive employees of their rightful earnings but also undermine the principles of fair labor practices. 

What To Do If You’ve Been Denied Overtime Pay

If you’ve been denied overtime pay, take action to protect your rights. Start by carefully documenting your work hours and retain pay stubs, timesheets, or any relevant communication with your employer regarding work hours. This documentation serves as crucial evidence in your unpaid overtime claim. The best way to protect your rights is to consult an employment lawyer who handles overtime pay disputes. They can assess your situation, review your documentation, and guide you on the best course of action.

About the Author
Douglas Lipsky is a co-founding partner of Lipsky Lowe LLP. He has extensive experience in all areas of employment law, including discrimination, sexual harassment, hostile work environment, retaliation, wrongful discharge, breach of contract, unpaid overtime, and unpaid tips. He also represents clients in complex wage and hour claims, including collective actions under the federal Fair Labor Standards Act and class actions under the laws of many different states. If you have questions about this article, contact Douglas today.