Overtime Law Glossary

Attorney's Fees: An employer who violates the FLSA is required to pay the employee's attorney fees if the employer is found to have violated the FLSA.

Back Wages: The FLSA provides that an employer who violates the overtime pay statute will be liable for unpaid minimum wages and overtime pay, including an additional equal amount as "liquidated damages."

Burden of Proof: In actions involving overtime pay under FLSA, the burden of proof most often is on the defendant-employer, not the plaintiff-employee, if the employer is claiming the employee is exempt from overtime pay.

Compensatory Time: Time for which an employee is entitled to be paid. Public employees may be compensated with "comp" time at the rate of one and one-half hours (1) hours for each hour worked. Comp time is not an option for private employers, except when the time in question occurs during the same work week, or by prior agreement.

Domestic Services: Any employee that is hired to provide companionship services for individuals who, because of age or infirmity, are unable to care for themselves, are considered exempt employees and are not covered under the FLSA for minimum wage and overtime pay considerations.

Exempt Employees: Certain jobs are exempt from the mandatory overtime pay requirements. Some of the categories of "exempt" employees are: (1) executive, administrative, and "professional." The "duties test" is used to determine whether an employee is exempt from overtime pay requirements. These three categories of employees must share two common traits: each job requirement must rise to the level of a "primary duty," and the exempt employee must exercise discretion an independent judgment in performing their job duties. The employer is responsible for proving the exempt status of any employee.

Exemptions from Overtime: The following job titles are exempt from the FLSA's overtime requirements: (1) seamen; (2) motor carrier (any employee the Secretary of Transportation has the power to establish qualifications and maximum service hours over); (3) emergency response personnel; (4) car salespersons, or (5) railway laborers.

Hourly Employee: An employee who is hired solely on the basis of a single hourly rate.

Limitations: Lawsuits filed under the Fair Labor Standards Act have to be filed within two (2) years from the date the violation occurred except if the action is due to a "willful violation." In that instance, the limitations period is three (3) years.

Liquidated Damages: A reasonable estimate of actual damages recoverable by one party for a breach by another.

Meal Time: "Bona fide meal times," when the employee is completely relieved of duty, is not considered compensable work time. There is no requirement that the employee be allowed to leave the employer's premises to be "completely relieved" of duty.

Non-Cash Benefits: An employer is allowed to pay a portion of the minimum wage in non-cash benefits, such as meals or lodging, provided the "wage" is the reasonable cost to the employer that furnishes these "wages" to his/her employees.

Overtime Pay: An employee is entitled to be compensated at one and one-half (1) times his/her hourly rate for any hours, or fraction of hours, worked in excess of forty (40) hours in one week. This rule applies to all non-exempt employees, not simply employees who are paid by the hour. However, an employer must know the employee has worked overtime. Overtime pay is paid for actual hours worked, not for hours for which the employee is paid even though he/she did not work (such as sick days, holidays, or vacation days).

Primary Duty: The importance of the exempt duty, the frequency with which the employee exercises discretionary powers, and the relative freedom from supervision. "Primary" means essential, principal, fundamental, or of first importance, requiring the employee to spend 50% of his/her time on professional duties.

Regular Rate: The hourly wage an employee earns for a forty (40) hour work week.

Retail or Service Establishment Exemptions: The FLSA exempts employees of retail or service establishments from it's overtime requirements if the employee's regular rate of pay exceeds one-and-one-half times the minimum wage, plus one-half of the employee's pay for a representative period (at least one month) is from commissions on goods and services.

Salaried Employee: An employee who is hired on a salary or fee basis, and pay is received on a pre-determined amount constituting all or part of the compensation, the amount of which is not subject to reduction due to quality or quantity of work performed. A salaried employee must receive his or her full salary for any week in which he or she performs work, regardless of the number of days/hours an employee actually worked. Exemption: The Department of Labor regulations allow an employer to deduct wages from a salaried employee for absences of a day or more for "personal" reasons, but not for sickness or accidents.

Tipped Employees: An employer is allowed to credit tips against the minimum wage for employees who typically receive more than $30 per month in tips, provided: (1) the employer pays no less than $2.13; (2) if the tips plus the $2.13 do not equal the minimum wage, the employer pays the difference; and (3) before crediting tips against the minimum wage, the employer discusses this policy with the affected employees.

Trainees: Trainees are not covered by the FLSA. Examples of whether an employee is considered a "trainee" are: (1) the employer providing the training receives no immediate advantage from the activities of the trainee; (2) the trainee is not necessarily entitled to a job at the completion of the training period; (3) the employer and trainee understand that the trainees are not entitled to be paid for the time spent while in training.

Travel Time: When an employee is traveling in furtherance of his/her employer's interests, the actual travel hours are to be treated as "hours worked." Reimbursement of legitimate travel expenses is not to be considered overtime pay.

Work Week: Forty (40) hours is considered a "work week" under the Federal Labor Standards Act (FLSA). The hours worked may be scheduled by the employer for any day of the week, including Saturdays, Sundays, and holidays (unless otherwise dictated by state or other federal laws, contract, or agreement).

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