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Wage and Overtime Compensation

Overtime and Wages

The Fair Labor Standards Act (FLSA) requires that non-exempt employees receive overtime pay equal to 1.5 x their hourly rate for each hour per week over 40 hours.  Your employer may require that you work overtime, but you must be paid at the overtime rate of pay.

Often times employers attempt to avoid overtime by paying their employees a salary, even though the employees are working more than 40 hours in a week.  Under these circumstances, employers are still required to pay overtime to non-exempt employees. As a general rule, overtime wages are calculated by dividing the weekly salary by 40 (or a bi-monthly salary by 80) to determine the regular hourly rate and then multiplying the regular hourly rate by 1.5 to determine the overtime rate.

An employee is entitled to recovery from their employer past due overtime pay up to two years after the date the pay was earned, and three years if it can be shown that the employer was deliberately violating the overtime law. In addition, the employer may be required to pay 2 times the amount that the employee was shorted.

Covered Employers

The FLSA’s overtime provisions do not apply to every company. Only companies whose gross receivables exceed $500,000 per year are required to pay overtime. This is total sales and you do not deduct any expenses.

Exempt v. Non-Exempt Employees

An employee is entitled to overtime pay anytime he or she works more than 40 hours in a week. However, not all employees are covered by the law. There are two types of employees, “exempt” employees – employees that are not covered by the law – and “non-exempt” employees who are covered by the law.

Hourly employees are automatically non-exempt and entitled to overtime pay for working more than 40 hours in a week.

High compensation, professional, or managerial jobs are exempt and therefore these employees cannot get overtime pay. These are people who are officers of corporations or have a high ranking title and a high degree of responsibility. Professionals are usually people who have to have special educational achievements like, lawyers, architects, doctors, and teachers. Managers are usually people who supervise others. But just because a job title is has the word “manager” in it does not make it exempt. The key is what work the job does.

There is also a list of exempt employees including: computer analysts, salespeople, and servers in restaurants. Recent changes in the Federal laws have created more exceptions, but individual states have their own laws.

Employer Tricks and Traps

Employers often make mistakes in deciding which employees are exempt and which are not. Employers even try to deceive employees into thinking that they are exempt (not entitled to overtime). You may still be entitled to overtime pay even if: 1) you are a salaried employee; 2) the word manager is in your title; 3) your employer says you are an independent contractor (you might not be); or 4) your employer just tells you that you are exempt. Another common trap is for employers to pay employees their regular hourly rate for hours over 40 in a week.


It is also illegal for an employer to retaliate against an employee for asking for his overtime pay, for contacting an attorney, or even filing a claim. If you complain of not receiving overtime pay and your employer fires you, you have a claim for retaliation. This is a separate violation of the law and you should definitely consult an employment lawyer.

If you have not been paid overtime, or have only been paid your regular wage for overtime hours, you may be entitled to recover from your employer. Please give use a call to arrange a free consultation so that we can discuss your case.