How does overtime work for a part-time job paid hourly?
May 25, 2017 9:07 AM Subscribe
Question about overtime pay for hourly work in the state of Washington.
I am a part-time employee paid an hourly rate at a small company. My hours vary based on how much work is available- so far, always under 40 hours a week. However, there is a project I will be working on soon that involves some travel and field work. The expectation is that I will work a 50 hour week for several weeks. In this type of work, it is not surprising that there would be overtime when the weather is nice for fieldwork. So, I asked about the company's overtime policy (overtime is not specifically mentioned in my employment agreement). I thought this was a reasonable question, but it seems like it's the first time someone has asked- I'm being told that it's unusual for people doing contractor-type work to be paid overtime, unless they work for something like a state agency- but I'm not a contractor, right? On this particular job, my *company* is a subcontractor.
To respond to this, my employer is considering having everyone re-negotiate their employment agreements to clearly state that overtime will not be paid. I am thinking this isn't something that can be done without changing the nature of employment- this would make us contractors or temporary workers, right?
The employer and the project are located in Washington State (although future projects could be in Washington or Oregon). I live in Oregon.
I am a part-time employee paid an hourly rate at a small company. My hours vary based on how much work is available- so far, always under 40 hours a week. However, there is a project I will be working on soon that involves some travel and field work. The expectation is that I will work a 50 hour week for several weeks. In this type of work, it is not surprising that there would be overtime when the weather is nice for fieldwork. So, I asked about the company's overtime policy (overtime is not specifically mentioned in my employment agreement). I thought this was a reasonable question, but it seems like it's the first time someone has asked- I'm being told that it's unusual for people doing contractor-type work to be paid overtime, unless they work for something like a state agency- but I'm not a contractor, right? On this particular job, my *company* is a subcontractor.
To respond to this, my employer is considering having everyone re-negotiate their employment agreements to clearly state that overtime will not be paid. I am thinking this isn't something that can be done without changing the nature of employment- this would make us contractors or temporary workers, right?
The employer and the project are located in Washington State (although future projects could be in Washington or Oregon). I live in Oregon.
Just to be clear, I'm understanding that you are an employee of the "company" here, and not a contractor. They pay you a check, take out taxes and social security and at the end of the year give you a W-2 form. If this is the case (and if you are not considered "exempt" as a manager or other exempt category), then when you work more than 40 hours in a pay week, they MUST pay you overtime at time-and-a-half, no ifs and or buts. They can not make a "contract" with you that says you don't get overtime. They can not give you "comp time" in the form of time off some other week for the hours you work over 40 in any particular week. It does't matter if you are normally part-time. It doesn't matter if they consider your job "temporary" or "seasonal." It doesn't matter if they are somebody else's subcontractor. If you are their non-exempt hourly employee, they have to pay you overtime when you work more than 40 hours in a standard work week.
posted by beagle at 9:26 AM on May 25, 2017 [8 favorites]
posted by beagle at 9:26 AM on May 25, 2017 [8 favorites]
"To respond to this, my employer is considering having everyone re-negotiate their employment agreements to clearly state that overtime will not be paid."
This sounds like they're changing terms without offering any consideration. Which wouldn't be kosher. (see my question history on non-compete agreements.)
Also, look at the IRS classification on contractors vs employees. They can't just re-classify you for their convenience, if you're not a contractor, you're not a contractor. Sounds...shady.
posted by notsnot at 9:28 AM on May 25, 2017 [1 favorite]
This sounds like they're changing terms without offering any consideration. Which wouldn't be kosher. (see my question history on non-compete agreements.)
Also, look at the IRS classification on contractors vs employees. They can't just re-classify you for their convenience, if you're not a contractor, you're not a contractor. Sounds...shady.
posted by notsnot at 9:28 AM on May 25, 2017 [1 favorite]
Your employer is evil. Watch your back.
posted by praemunire at 9:37 AM on May 25, 2017 [1 favorite]
posted by praemunire at 9:37 AM on May 25, 2017 [1 favorite]
The most important factor here is: are you an employee or are you a contractor and if you are an employee who is your employer?
Scenario 1: You own a graphic design company, you you work on a contract basis for Acme Inc. doing graphic design work. Acme Inc. pays Graphic Design Inc. for the work. In this situation, no overtime is required unless it was in the original contract for services.
Scenario 2: You work for Outsourcing, Inc. they provide workers to Acme, Inc. Acme, Inc. pays Ousourcing, Inc. and Outsourcing, Inc. pays you. You are an employee of Outsourcing, Inc. and your paychecks (with normal employment taxes taken out) are provided by Outsourcing, Inc. In this case Outsourcing, Inc. owes you overtime and if they aren't getting paid enough by Acme, Inc. they need to take it up with Acme, Inc.
Scenario 3: You are a legitimate Independent Contractor to Acme, Inc. Acme, Inc. writes checks directly to you and does not take out any normal payroll taxes. Overtime should have been negotiated into your contract with Acme when you took on the work.
Scenario 4 (most likely): You are an employee of Acme, Inc. but they want to treat you as if you are an Independent Contractor. In this case they would owe you overtime per WA State rules and they should be taking out normal payroll taxes from your paychecks and filing with the state on your behalf and issuing you a W2 for your tax filing purposes. Here is a guide for independent contractors in WA state.
If it is scenario 4 I would recommend looking for other employment because they are treating you poorly and will likely not react in a plesant way to being told their practices are illegal. If they don't pay you owed overtime you can file a wage claim with the state.
posted by magnetsphere at 9:45 AM on May 25, 2017 [2 favorites]
Scenario 1: You own a graphic design company, you you work on a contract basis for Acme Inc. doing graphic design work. Acme Inc. pays Graphic Design Inc. for the work. In this situation, no overtime is required unless it was in the original contract for services.
Scenario 2: You work for Outsourcing, Inc. they provide workers to Acme, Inc. Acme, Inc. pays Ousourcing, Inc. and Outsourcing, Inc. pays you. You are an employee of Outsourcing, Inc. and your paychecks (with normal employment taxes taken out) are provided by Outsourcing, Inc. In this case Outsourcing, Inc. owes you overtime and if they aren't getting paid enough by Acme, Inc. they need to take it up with Acme, Inc.
Scenario 3: You are a legitimate Independent Contractor to Acme, Inc. Acme, Inc. writes checks directly to you and does not take out any normal payroll taxes. Overtime should have been negotiated into your contract with Acme when you took on the work.
Scenario 4 (most likely): You are an employee of Acme, Inc. but they want to treat you as if you are an Independent Contractor. In this case they would owe you overtime per WA State rules and they should be taking out normal payroll taxes from your paychecks and filing with the state on your behalf and issuing you a W2 for your tax filing purposes. Here is a guide for independent contractors in WA state.
If it is scenario 4 I would recommend looking for other employment because they are treating you poorly and will likely not react in a plesant way to being told their practices are illegal. If they don't pay you owed overtime you can file a wage claim with the state.
posted by magnetsphere at 9:45 AM on May 25, 2017 [2 favorites]
You've tagged this question as "non-exempt" and, to be clear about that term, it means the position is not exempt from overtime rules. If your position is non-exempt, they owe you overtime. Companies don't get to decide for themselves your exempt status.
posted by soelo at 10:00 AM on May 25, 2017
posted by soelo at 10:00 AM on May 25, 2017
First, and primarily, the other posts here are correct - if you are a non-exempt employee (which is a very specific legal question that depends on your individual job circumstances), your employer does not have the choice to determine how overtime is paid. They are obligated to pay overtime at at least time and a half for hours exceeding 40 hours a week. Period.
That said...
I am a part-time employee paid an hourly rate at a small company.
So, I asked about the company's overtime policy [...] but it seems like it's the first time someone has asked
my employer is considering having everyone re-negotiate their employment agreements
Your company is either not on top of labor law (which is scary) or is deliberately screwing over its employees (which is scarier). I think you should look for a new job. Even if you are legally right, you will either have to get your employer to voluntarily pay overtime or sue your employer. Governmental enforcement of labor law is so uncommon as to be effectively non-existant. Based on your description, your company is not likely going to voluntarily pay you overtime (I suspect they never included the cost in their business costs, and hence, might not be able to pay you overtime). So, your option is to find a new job or sue your employer. As a general note, I will say the former option is generally significantly easier, significantly cheaper, and significantly less likely to end up with you being blacklisted.
Employment discrimination based on retribution for legal action is illegal. Don't think it doesn't happen - again, who's going to stop your employer?
posted by saeculorum at 10:53 AM on May 25, 2017 [4 favorites]
That said...
I am a part-time employee paid an hourly rate at a small company.
So, I asked about the company's overtime policy [...] but it seems like it's the first time someone has asked
my employer is considering having everyone re-negotiate their employment agreements
Your company is either not on top of labor law (which is scary) or is deliberately screwing over its employees (which is scarier). I think you should look for a new job. Even if you are legally right, you will either have to get your employer to voluntarily pay overtime or sue your employer. Governmental enforcement of labor law is so uncommon as to be effectively non-existant. Based on your description, your company is not likely going to voluntarily pay you overtime (I suspect they never included the cost in their business costs, and hence, might not be able to pay you overtime). So, your option is to find a new job or sue your employer. As a general note, I will say the former option is generally significantly easier, significantly cheaper, and significantly less likely to end up with you being blacklisted.
Employment discrimination based on retribution for legal action is illegal. Don't think it doesn't happen - again, who's going to stop your employer?
posted by saeculorum at 10:53 AM on May 25, 2017 [4 favorites]
The only re-negotiating that should be happening here is that your employer should be contacting their client and informing the client that either they have to pay an increased rate for the additional hours, or they have to find a way to have you do the work in 40 hours a week. The rules on this are spectacularly inflexible unless you fall in an exempt group, and "exempt" and "hourly" flat out don't go together.
...And then there's the real world, where you are right that you should be receiving overtime, but you are going to have to value a couple weeks' worth of extra pay as opposed to the amount of hassle you're going to have to go through to get it. I'm not saying you shouldn't say something; I'm saying that only you know the circumstances of where you are well enough that you know whether you feel okay with this. Like, I have elected to ignore a violation of this before because it was entirely stupid that it was happening, but my overall compensation was actually perfectly fair for what I was being asked to work. At that point, it's a "shame on you" for the employer doing things the wrong way, but they aren't necessarily trying to screw you; if they were doing things properly they might have offered you the same total amount and just structured differently.
Again, I'm not saying this is okay, I'm just trying to provide a framework for you to think about whether it's a not-okay that you can tolerate.
posted by Sequence at 12:09 PM on May 25, 2017
...And then there's the real world, where you are right that you should be receiving overtime, but you are going to have to value a couple weeks' worth of extra pay as opposed to the amount of hassle you're going to have to go through to get it. I'm not saying you shouldn't say something; I'm saying that only you know the circumstances of where you are well enough that you know whether you feel okay with this. Like, I have elected to ignore a violation of this before because it was entirely stupid that it was happening, but my overall compensation was actually perfectly fair for what I was being asked to work. At that point, it's a "shame on you" for the employer doing things the wrong way, but they aren't necessarily trying to screw you; if they were doing things properly they might have offered you the same total amount and just structured differently.
Again, I'm not saying this is okay, I'm just trying to provide a framework for you to think about whether it's a not-okay that you can tolerate.
posted by Sequence at 12:09 PM on May 25, 2017
I'm going to assume that you are a w-2 employee and you are not an exempt employee as you said you work part time and your hours are variable.
Yes, as a non-exempt employee you are eligible for overtime and 1.5x pay for any hours above 40 in a week. Attempting to reclassify you or do comp time would be wage theft. Contracts that try to waive overtime (unless they make you a manager and pay you enough to become exempt) are not valid.
However, I don't think this means your employer is automatically evil. Clueless, uninformed, struggling with admin, perhaps. Comp time rules supreme in many small organizations and businesses. It can be a fair trade if all involved are OK. The deck is stacked towards the bosses/managers. It's a slippery slope. If the "renegotiating contracts" is a large effort involving research that is still disregarding federal law, I would be very concerned.
However, if it's a good job otherwise, you might be able to propose something honest and on budget. I'm currently turing around a small company from comp time to tracking hours, with payroll budgets that have no room for overtime, and here's what I do. Non-exempt employees do timesheets. They get paid overtime. They can work longer than 40 hours but they must:
1. inform their superior and get the OK
2. fill out a completely honest time sheet
3. accept that their hours will be reduced next week to compensate
If an employee has to stay late or do the big push to get something done, they get overtime if they work over 40. They inform their boss. In the next week, they reduce their hours (again in consultation with supervisor) by 1.5x the hours they worked overtime. The budget balances out, and the employee that worked late gets .5 extra free time of their life back.
You may be able to pitch something like this to your supervisors, and in a way that does not sound threatening. Memail me if you would like an example of language to use.
posted by sol at 9:53 PM on May 25, 2017
Yes, as a non-exempt employee you are eligible for overtime and 1.5x pay for any hours above 40 in a week. Attempting to reclassify you or do comp time would be wage theft. Contracts that try to waive overtime (unless they make you a manager and pay you enough to become exempt) are not valid.
However, I don't think this means your employer is automatically evil. Clueless, uninformed, struggling with admin, perhaps. Comp time rules supreme in many small organizations and businesses. It can be a fair trade if all involved are OK. The deck is stacked towards the bosses/managers. It's a slippery slope. If the "renegotiating contracts" is a large effort involving research that is still disregarding federal law, I would be very concerned.
However, if it's a good job otherwise, you might be able to propose something honest and on budget. I'm currently turing around a small company from comp time to tracking hours, with payroll budgets that have no room for overtime, and here's what I do. Non-exempt employees do timesheets. They get paid overtime. They can work longer than 40 hours but they must:
1. inform their superior and get the OK
2. fill out a completely honest time sheet
3. accept that their hours will be reduced next week to compensate
If an employee has to stay late or do the big push to get something done, they get overtime if they work over 40. They inform their boss. In the next week, they reduce their hours (again in consultation with supervisor) by 1.5x the hours they worked overtime. The budget balances out, and the employee that worked late gets .5 extra free time of their life back.
You may be able to pitch something like this to your supervisors, and in a way that does not sound threatening. Memail me if you would like an example of language to use.
posted by sol at 9:53 PM on May 25, 2017
I think it depends on the nature of the contract renegotiation.
If your employer is saying "You'll have to work overtime, but we won't pay you for it," that is clearly illegal (assuming you're not exempt).
But, if your employer is saying "No hourly workers will be permitted to work more than 40 hours in a given week going forward," there's nothing inherently wrong with that! Some work might not get done, or they might have to get more efficient about certain things, or schedule people differently, or whatever, but there's nothing that guarantees you overtime work/pay if your employer does not authorize you to do it.
posted by rainbowbrite at 2:26 PM on May 26, 2017
If your employer is saying "You'll have to work overtime, but we won't pay you for it," that is clearly illegal (assuming you're not exempt).
But, if your employer is saying "No hourly workers will be permitted to work more than 40 hours in a given week going forward," there's nothing inherently wrong with that! Some work might not get done, or they might have to get more efficient about certain things, or schedule people differently, or whatever, but there's nothing that guarantees you overtime work/pay if your employer does not authorize you to do it.
posted by rainbowbrite at 2:26 PM on May 26, 2017
This thread is closed to new comments.
posted by k5.user at 9:12 AM on May 25, 2017