I spoke with someone last week who is supposed to get overtime pay for any work done outside of the regular eight-hour day. It hadn’t been a problem in the past, but recently the company hasn’t been approving overtime pay. He loves his job but feels the work he and his peers are doing isn’t being appreciated; and the work is such that he can’t just leave when his eight hours are over. What is the best way to handle the situation?
Looking at things from a strictly legal perspective, if these team members are classified as nonexempt employees, in most cases they are entitled to overtime pay, according to David Reischer, Esq., attorney and CEO of LegalAdvice.com.
“Federal and most state laws require that nonexempt employees are entitled to overtime for every hour beyond 40 that they work in a workweek,” Reischer explains. “The federal Fair Labor Standards Act (FLSA) sets out the overtime rules for certain types of businesses. As a rough rule, a business is covered by the FLSA when they have $500,000 or more in annual sales. Small businesses may be required to pay overtime, too, when certain conditions are met. Most employees are entitled to overtime unless they fit into an exception of the FLSA or state law.”
But as in most any situation, there are nuances to consider.
“The employer has an obligation to keep promises, and the issue boils down to what the employee can reasonably assume the employer has promised,” adds John Hooker, professor of business ethics and social responsibility at Carnegie Mellon University’s Tepper School of Business. “If the employee is nonexempt, he or she is legally entitled to overtime pay, but not to an opportunity to work overtime.”
And therein lies the rub, so to speak.
As Hooker notes, there is nothing to indicate that the employer has promised such an opportunity — and even if that were true, the employee cannot reasonably assume that the promise holds indefinitely.
“It is generally understood that conditions change, and opportunities for overtime work may come and go,” he says. “However, if the employer is, in effect, requiring the employee to work overtime by assigning duties that cannot be completed in eight hours a day, then we may have a breach of labor law.”
In that case, Hooker suggests consulting an attorney.
Exempt employees are in another category, he notes.
For example, say an employer has promised an exempt employee that they will start being paid for time they put in above 40 hours a week.
“The promise has no meaning unless the actual amount is specified, because there is no hourly rate for exempt employees,” Hooker explains. “Even if this is clarified, it is again unreasonable to assume the promise is indefinite unless it is part of an employment contract. It has more the character of a bonus, and awarding a bonus carries no implied promise to keep giving the bonus.”
In that case, he says the employer has no ethical obligation to continue overtime pay.
“In any event, it is generally poor management practice to promise exempt employees overtime pay,'” Hooker concludes. “A better policy is to promise a bonus to reward good work.”
(Article written by Kathleen Furore)