What's the deal with salary non-exempt and overtime?

January 30, 2016 4:46 PM

Are there exceptions to overtime after 40 hours?

I started a new job recently at a medium sized company that operates with all of the worst stereotypes of a small family owned business. Looking back there were totally warning signs, but I didn't realize the degree of toxic bullshit I was getting into until I'd been around a couple of weeks.

I'm being paid salary, classified as non-exempt. I'm not being paid time and a half over forty hours. My understanding is that non exempt means you get OT after forty, but I am hardly a labor law expert. The googling I've done seems to support that understanding, but givin the state of labor law in the US I wouldn't be a bit surprised if there were plenty of loopholes that would leave my employer legally in the clear.

Basically, I'm ready to jump ship from a work environment that's already negatively affecting my health after a month and a half. And either way I feel intentionally misled and fucked over. But whether I'm being fucked with the support of the law or in violation of the law is going to be a big factor in how quickly I bail.

So am I due overtime or did I just agree to a really dumb pay structure?

I'm in Austin TX if it matters.

posted by f_panda to Work & Money (17 answers total)

Here's a list of some free legal hotlines in Texas, and this lists the local Austin District Office for the Department of Labor- they should be able to answer whether there's some kind of exemption for your employer. But yeah, if you qualify as exempt, in general, you should get OT.
posted by three_red_balloons at 5:05 PM on January 30, 2016 [1 favorite]

It matters what your duties are, how much you're paid, and there are a few other wrinkles. Smaller employers screw this up a lot, mostly because it's pretty easy to get it wrong and also they often screw up on HR stuff. Anyway, we need more details, and you want to contact an attorney to be sure.

The chances that your misery will decrease when you fight this are roughly the same as your chances of winning the next PowerBall drawing. I strongly suggest filing a complaint with your state's labor authority and getting another job.
posted by SMPA at 5:07 PM on January 30, 2016 [2 favorites]

If nothing else you will know what questions to ask of future potential employers.
posted by ThatCanadianGirl at 5:14 PM on January 30, 2016

A plaintiffs' wage and hour attorney should consult with you for free.

Employers violate wage and hour laws all the time.
posted by J. Wilson at 5:30 PM on January 30, 2016 [1 favorite]

Response by poster: I'm running the payroll. If I have questions about particulars or run into aspects I don't know I contact someone who is not in the office at the moment. Don't think I meet the exempt threshold of independent judgement, and they obviously don't either or they'd happily have me exempt. 40k.

I totally understand the potential misery in fighting it. I don't plan on any sort of real battle. I plan on job hunting. I'm sort of deciding on staying at this job while hunting or not. Normally I would, but I feel extremely uncomfortable being involved in payroll for this employer if they are in fact violating FLSA.

Don't mean to threadsit. Will shut up unless further detail is needed.
posted by f_panda at 5:34 PM on January 30, 2016

Non-exempt means you should be getting overtime, period. Go back and double-check your offer letter and paperwork.

The way to fight this is to advocate for yourself at work and/or a labor board. But it's a hard road to get anything timely out of a truly recalcitrant employer. You may just want to pick up and leave, get a new job, and then go after the old employer.

You need to be keeping good records of all the time spent working.
posted by Cool Papa Bell at 5:58 PM on January 30, 2016 [1 favorite]

Maybe you could leave behind some kind of record -- a complaint to a government agency, a polite, inquisitive letter to management -- that could help someone who comes after you who is able to fight more.
posted by amtho at 6:19 PM on January 30, 2016

Are you sure you are being classified as "non-exempt"? Because, yeah, non-exempt means OT after 40 hours. (OT is what you are "exempt" from!)

While the vast majority of people who are exempt are on salary and make nothing (more) over 40, it is possible to be exempt and paid by the hour (you get straight time over 40). Non-exempt people are usually paid by the hour but if not they get OT by converting their salary back to an hourly wage and paying 1.5x that.

(Some employers have exempt people punch a clock and dock them when they work under 40, but don't pay them anything more when they work over 40. That's generally not legal.)
posted by MattD at 6:44 PM on January 30, 2016

If you are classified as non-exempt, you're ready to bail, and you are running the payroll, I'd consider paying yourself time and a half for overtime.
posted by layceepee at 6:51 PM on January 30, 2016 [2 favorites]

Yes, if you're correctly classified as non-exempt, your employer is legally required to pay you one and half times over your regular hourly wage after 40 hours. This is a federal law (the Fair Labor Standards Act) and isn't up to your employer. There are no loopholes.

It is possible that your employer wrongly classified you as non-exempt, but since this carries significant financial implications, it seems unlikely (a much more common scenario is employers classifying someone as exempt when they should be non-exempt.)

Exempt employers are paid a salary, and must be paid their full salary for any week in which they do any work.

Basically, you can't be paid salary and be non-exempt. Your employer is violating the law.
posted by Automocar at 9:16 PM on January 30, 2016 [1 favorite]

I should also add that even for non-exempt positions, it's common to hire them at a yearly "salary", but this is more a shorthand than anything else. Your hours should be tracked and your paystub should have your hourly wage on it (which is likely to be something like $22.4327 or something crazy like that.)
posted by Automocar at 9:21 PM on January 30, 2016 [1 favorite]

I asked a somewhat similar question here.

The most helpful answer referred me to the U.S. Department of Labor's Factsheet #23 on Overtime Pay.

After pursuing my issue, I discovered that the Department of Labor will not invoke jurisdiction for your case unless the Business/Entity in question has revenue in excess of $500,000 per year.

The #23 guideline, and the relevant Federal law, is still in effect. But you will need your own lawyer to pursue your case, if the DOL can't assist.
posted by yesster at 12:57 AM on January 31, 2016 [1 favorite]

One other thing, from my recent experience, anything related to the U.S. Department of Labor: they will only pursue the last 2 calendar years. That 2-year limit has nothing to do with the employer's obligations and liability, which extend further. It's just the constraints placed upon their mandate.
posted by yesster at 1:03 AM on January 31, 2016

If the employer does not meet the size criteria for applying the Federal law, that does not necessarily end the issue. There may be similar protections afforded under your state's laws that would apply.
posted by megatherium at 5:05 AM on January 31, 2016

Texas Workforce Commission:
Exemptions from Minimum Wage and Overtime.
Exemptions from Overtime Only
Exemption Categories Under the FLSA (has links to duties test and salary test)

I'd read through those and if they make you believe you should be getting OT (and it sounds like that's likely), I'd be on the phone with the Commission tomorrow morning to ask for advice.

Good luck!
posted by Beti at 10:24 AM on January 31, 2016

It does sound like you should be receiving overtime pay. Interestingly, in the Texas Workforce Commission links Beti posted, the "Duties Tests" page lists "payroll administrator" as an example of an occupation typically exempt in the administrative category. But you're aware of the key distinction: "the exercise of discretion and independent judgment with respect to matters of significance."

See also: the Texas Workforce Commission's Regular Rate for Salaried Non-Exempt Employees page.

The rest of this response is guesswork without knowing what communication you may have already had with your supervisor on this topic. I would be looking hard for another job. The job is not worth your health! In the meantime, I would try for evidence (email?) from a higher-up showing that they understand your duties and what the law requires, but they will not approve overtime pay for you. That should temporarily ease your conscience about working there until you find your next job.

Are other employees also entitled to overtime, but not being paid for it? If there are a lot of them being denied a lot of overtime pay, a labor attorney may be interested. If there are at least several, the US Dept of Labor's Wage & Hour Division (linked by three_red_balloons) should have an interest. (Note: Not the TX Workforce Commission.) If you're the only one being paid unfairly, it is probably best to just move on.
posted by Snerd at 11:09 AM on January 31, 2016

FWIW, overtime pay suits are pretty much the only employment law cases where the statute mandates that the employer pays attorney fees. As a result, you should have no problem finding an attorney to take the case for little or no money up front, if the facts are as black and white as you represent. Search for a qualified one in your area at Nela.org

This is a federal law, state law doesn't matter unless you lucky enough to live in state that has a better law than the FLSA (not Texas). Keep meticulous documentation and sue on your way out.
posted by Lame_username at 4:59 PM on January 31, 2016