Best Ohio Wage and Hour Attorney Answer: I’m a non-exempt manager, should I be paid overtime? Should I get paid overtime on salary? Can my boss avoid paying overtime by putting me on a fluctuating work week? If I am I’m salaried, how do I determine my regular rate of pay in order to calculate my overtime?
We have a lot of clients come in saying, “I am not being paid correctly,” or “I am not being paid fairly.” Determining whether you may have a wage and hour claim may be one of the most complex aspects of employment litigation.
As we have blogged about overtime violations in the past (see The FLSA Can Make A Damages Mountain Out Of Molehill Lost Wages, Making Sense of the FLSA’s Administrative Exemption, Top Wage Lawyer Reply: What Can I Do If My Job Won’t Pay Anyone Overtime?, and Top Wage and Hour Lawyer Reply: As A Salaried Employee, Am I Exempt From Overtime Pay?), an employer who is subject to the requirements of the Fair Labor Standards Act (“FLSA“) is required to pay all nonexempt employees time and one-half their regular hourly rates for all hours worked beyond 40 per week. Additionally, Ohio has enacted laws regarding minimum wage and overtime pay rates contained in Ohio Minimum Fair Wage Standards laws.
One of the most important things to remember is that employers are held to strict and exact standards when it comes to whether exemptions to the FLSA apply to employees. Requiring strict adherence to the rules is intended to protect employees from employers looking to cut corners by claiming an employee isn’t entitled to overtime due to only to a position title. Perhaps more than other types of protections afforded to employees, wage and hour rules are designed to be more favorable to employees. This means that even accidental or inadvertent mistakes made to the employee’s disadvantage could end up costing big time. In taking this a step further, employers should make sure that when it comes to deciding which provision to follow, or which rule to apply, that cost savings to the employer should not be the number one concern. A lesson on what can happen when an employer decides to cut corners comes from a recent decision in a class action suit brought in Pennsylvania. In Verderame v. RadioShack, the United States District Court, E.D. Pennsylvania reviewed RadioShack’s pay structure for non-exempt managers and determined that even though it complied with federal laws, it fell short of meeting the requirements contained in Pennsylvania’s state statutes, which are similar in nature to the laws in Ohio.
Let’s take a look at the reason for the ruling. First, RadioShack paid their non-exempt managers based on a fluctuating work week. The language relating to overtime contained in the FLSA states that an employee should receive “‘compensation for his employment in excess of [forty hours] at a rate not less than one and one-half times the regular rate at which he is employed.’ 29 U.S.C. § 207(a).” The calculation for the overtime rate is easy to do when the employee receives a set hourly rate. But when the employee’s rate of pay fluctuates it becomes more difficult to determine.
According to examples contained in federal regulations, the regular rate is calculated for non-exempt salaried employees by dividing the total number of hours worked by the salary rate to come up with a base rate, then adding half the rate for every hour worked over 40. For example under the FLSA: If an employee earned $1,000 per week and worked 50 hours, his base rate would be $20.00 per hour. His overtime rate is then calculated to be $30.00 per hour, so that the employee should receive $20.00 per hour for the first 40 hours, then $30.00 per hour for the last 10. The employee should receive $1100 for the week, instead of $1,000.
However, Pennsylvania law does not provide for calculations based on the fluctuating workweek method described above. The law simply requires overtime be paid not less than one and one half times the regular rate. To use the same example above, if an employee was paid $1,000 in salary per week, and worked 50 hours, his base rate would still be $20.00 per hour and he would receive the base rate for the entire 50 hours. For the 10 hours of overtime, the employee would still get $30.00 per hour, so that his salary would equal $1,300.
In determining whether the legislature in Pennsylvania intended to provide employees a more generous pay structure, the Court in Verderame reasoned:
While RadioShack’s compensation plan may be permissible under the FLSA, it cannot be reconciled with the plain language of § 231.43(d)(3). Indeed, while an overtime rate of “one half” is clearly stated in other regulatory language, it is conspicuously absent from section 231.43(d). As the court in Foster noted, “[h]ad the Pennsylvania regulatory body wished to authorize one-half time payment under section 231.43(d), it certainly knew how to do so.” Foster, 285 F.R.D. at 345 (commenting on the identical language of 34 Pa.Code § 231.43(b) and 29 C.F.R. § 778.112). Although section 231.43(b) pertains to a flat sum for a day’s work, and not as here, a fluctuating workweek, the language used in each certainly illustrates the regulatory bodies’ willingness to set out “one half” overtime standards. …
I thus conclude that the absence of the “half-time” language in section 231.43(d)(3) and the inclusion of “not less than 1½ times” is indicative of Industrial Board of the Department of Labor’s intent in drafting the regulations at issue.
The important lesson here, is that even though Ohio’s wage laws differ from Pennsylvania’s, in most cases involving the FLSA, and state wage laws, courts are inclined to apply the rules strictly. Requiring strict adherence can result in favorable decisions for the employee, or groups of employees. And remember, if you have a question relating to whether you meet an exemption to the overtime requirements the best thing to do is seek advice from an experience wage and hour lawyer.
If you believe that your employer is not paying you all of your wages for all of your lawfully earned overtime compensation at a rate of one and half times your normal wages as requires under the Federal Fair Labor Standards Act or Ohio Minimum Fair Wage Standards laws or you are an nonexempt employee that has been misclassified as exempt or independent contractor, contact the attorneys at Spitz, The Employee’s Law Firm today for a free and confidential initial consultation. The wage and hour lawyers at Spitz, The Employee’s Law Firm will provide you with the best options for your overtime pay dispute situation. If you even think that you may be entitled to overtime pay that you are not being paid, call 866-797-6040.
The materials available at the top of this overtime, wage and hour web page and at this employment law website are for informational purposes only and not for the purpose of providing legal advice. If you are still asking, “Am I entitled to overtime?”, “Does my job have to pay me for …”, “My paycheck is not right…” or “What do I do if…”, the your best option is to contact an Ohio overtime attorney to obtain advice with respect to FLSA questions or any particular employment law issue. Use and access to this employment law website or any of the links contained within the site do not create an attorney-client relationship. The legal opinions expressed at the top of this page or through this site are the opinions of the individual lawyer and may not reflect the opinions of Spitz, The Employee’s Law Firm, Brian Spitz, or any individual attorney.