Human resources

Are you entitled to overtime pay?

March 13, 2014: 2:46 PM ET

Federal and state laws about overtime are so vague that even the courts disagree on who qualifies. Here's what to do if you think you're missing out.


FORTUNE -- Dear Annie: Can you clarify something for me? About eight months ago I started a new job as an administrative assistant, working for four senior managers who share an office suite. I love it here, but there is a lot more to do than anybody explained to me when I was hired. So I'm working a couple of evenings a week, and some weekends, just to keep up.

I don't mind that, but the thing is, I'm getting paid a salary, with no overtime. A friend is telling me that I've been "misclassified" and that I should be getting overtime pay for all those extra hours. Is that true? Should I go and ask someone in human resources about this and, if so, how do I ask without seeming to complain? I really like it here and do not want to rock the boat. -- Chicago Sue

Dear C.S.: I wish I could give you a straightforward yes or no answer about whether you're owed overtime. Alas, the whole issue of how different kinds of employees should be classified under the federal Fair Labor Standards Act (FLSA), and its state counterparts, is hard for even seasoned attorneys and judges -- not to mention employers -- to sort out.

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"The FLSA has a lot of ambiguities written into it, and the Department of Labor's regulations are confusing," says Richard Alfred, who represents employers as chair of Seyfarth Shaw's wage-and-hour litigation group in Boston. The uncertainty has created an explosion of wage-and-hour lawsuits, most of them about overtime pay, he adds. Federal court cases more than doubled in the past decade, to 7,764 last year. Says Alfred, "That figure doesn't include suits brought in state courts, which would multiply the total exponentially."

The overtime issue keeps heating up: Last week, the Supreme Court agreed to hear a case on whether Amazon (AMZN) warehouse workers should be paid for the hours each week that they spend going through security checks. Then, this week, the Obama Administration announced a plan to expand the federal definition of who is entitled to overtime. Labor Secretary Tom Perez expects the new rules to cover millions more people in "white collar" jobs.

For now, though, here's a thumbnail sketch of how this works: To be considered exempt from overtime under the FLSA, an employee has to meet both a salary test (generally a guaranteed salary of $455 or more per week) and a duties test. There are three broad categories of exemptions: executive, professional, and administrative. To be covered by an executive exemption, a person's main duty has to be managing (including hiring and firing), and he or she has to supervise two or more full-time employees.

So far, so good, right? "It's pretty easy to tell executives from non-executives," notes Alfred. "But from there, it gets fuzzier. Professional and administrative exemptions are full of gray areas." You may well be in one of them. The law says two of the duties tests for an administrative exemption are, first, whether someone -- you, for instance -- does work generally considered "white collar" and, second, "exercises discretion and independent judgment" while doing it.

"Classifying any employee correctly depends so much on the details of the particular job, and how the person performs it, that it's impossible to generalize," says Joel Rice, a partner in management-side employment law firm Fisher & Phillips, in your hometown of Chicago. "For example, if you have a lot of discretion in how you spend your time, you can be covered by an exemption even though you don't supervise anybody."

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Moreover, there's another complication: Being paid a salary doesn't necessarily mean you aren't entitled to overtime pay. "If someone's activities don't come under any of the exemptions, they are entitled to overtime pay if they work more than 40 hours per week," Rice says.

You can figure out what your overtime rate would be by dividing your weekly salary by 40 to determine your hourly wage, and then figure on half of that for any hours you work over 40. "Some employers do pay people this way," Rice says. "It just takes a little extra math."

Let's say your friend is right and you've been misclassified as exempt when, in reality, you shouldn't be. First, are you sure? It may be that you're already classified correctly, but that there's a gap in communication.

"Are you reporting to anyone on the extra hours you've been working?" asks Christine Webber, a partner at Washington, D.C., law firm Cohen Milstein, who usually represents plaintiffs in wage-and-hour cases. "If you're reporting to four different people, none of them may be aware of how much work the others are assigning you -- and, if you're not telling anyone in human resources how many hours your job takes, they have no way of knowing that it's more than 40."

So your first step should be to find out whether or not HR considers you exempt. If not, they owe you overtime for all those late nights and weekends. Secretarial and clerical employees are usually nonexempt, but if for some reason you are exempt, "you still need to talk to someone about all the extra work you're doing on evenings and weekends," says Webber. "They may offer you something like more vacation time or a raise, to make up for all those extra hours -- or they may even hire another assistant to take on some of the workload."

Rice agrees: "Even if your employer considers you exempt, and sticks to that classification, try to work it out. Aim for an agreement that gives you higher pay or some other perk. Approach it as you would any other salary negotiation."

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Suppose you have this conversation with HR and you still think that, as your friend says, you've been misclassified, and underpaid as a result. Of course you can consult an employment lawyer in your state. You can also file a complaint with the nearest regional office of the federal Department of Labor's wage-and-hour division, whose investigators will look into it (eventually: most regional offices are struggling with huge backlogs.) But, especially since you hesitate to "rock the boat," those should be tactics of last resort. Good luck.

Talkback: Have you ever felt legally entitled to overtime pay, but weren't getting any? What did you do about it? Leave a comment below.

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