Overtime: What employees should know.

It is nearing midnight and you are still at your desk. You've been working since early this morning, you're on your fourth Kit Kat and your boss told you not to go home until the report is on her desk. You wonder once again... shouldn't the company be paying you overtime for this hard labor?

What is overtime?

Overtime refers to the pay that most non-exempt employees receive when they work more than 40 hours in a week. Overtime pay is higher than a worker's normal hourly rate.

The Fair Labor Standards Act

The Fair Labor Standards Act (FLSA) dictates the terms under which overtime must be paid (as well as the minimum wage and terms of child labor). The FLSA is administered by the U.S. Department of Labor and is part of federal law. The FLSA does not apply to employees of hospitals, schools, the government or of businesses that do less than $500,000 in business annually. In addition, the act exempts people in a number of roles from overtime pay.

Overtime pay is required to be at least one and a half times each person's normal hourly rate. The overtime pay is due for all hours over 40 that the person works in a specific workweek.

State Overtime Laws

Many states also have overtime laws. While states may not allow more lenient overtime laws than the federal government requires, the states may have more stringent legislation. When state overtime law allows overtime in more circumstances or has higher pay than the federal law mandates, employers must follow the state law.

Exempt? Non-Exempt? Huh?

One of the most confusing aspects of overtime law is the exempt vs. non-exempt status. The law exempts several categories of workers from mandatory overtime pay. For example, those working for small newspapers, on fishing operations and at seasonal carnivals do not earn overtime. More ambiguous is the part of the act that exempts "executive, administrative and professional employees"as well as "certain skilled computer professionals." Each of these roles is loosely defined by the Department of Labor, however it is not the job title that determines the exempt status. Rather, the government has certain tests that are held up against each employee's pay rate and job duties. For example, exempt computer professionals must be paid a salary of not less than $455 per week (or an hourly rate of less than $27.63 an hour) and must have duties that are either related to skilled computer design, development, documentation, testing or programming (or some combination thereof) in order to be considered exempt.

Needless to say, the regulations regarding exempt vs. non-exempt status are confusing and often misunderstood. For most positions, exempt status is either dependent upon the person being a manager or a skilled professional with creative autonomy.

So, if you spend most of your work hours doing manual labor or following specific directives, your time burning the midnight oil should probably be netting you some overtime pay. If however, you are a highly paid and creative professional, that pizza the boss ordered a few hours ago is the closest thing to overtime you're going to see tonight.