What are the laws on overtime pay?

June 27, 2012

What are the laws on overtime pay?

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By Rex Huppke / Chicago Tribune
Q: Would you please describe the legal definition of salaried versus hourly employees? I am retired, but a friend is working for a small non-profit that will not pay overtime or give comp time, yet requires all employees be "docked" for personal time off.

A: I thought I knew the answer to this question off the top of my head, but as it turns out, I'm not really all that smart. (You were right, Ms. Collins from 3rd grade. Stop gloating.)

It turns out that when it comes to being paid overtime or given time off in return for extra hours worked, whether you're a salaried or hourly employee is only part of the equation.

Joel Rice, an employment law expert at Fisher & Phillips in Chicago, explained that everyone -- salaried or hourly -- is entitled to overtime pay unless they fall under certain exemptions.

"When you say salaried or hourly, it's a little bit of a misnomer," Rice says. "Unless you're exempt, it's assumed you're covered by the federal and state wage and hour laws."

The exemptions include one for executives -- people who supervise employees, give them reviews and have the power to hire or fire. There are administrative exemptions that apply to people who have jobs in which they exercise a good deal of discretion and can effect matters of company policy -- a human resources manager, for example.

The exemption can also apply to certain professionals, such as lawyers, doctors and accountants, as well as to creative professionals, such as artists and writers. (I'm assuming world-renowned workplace-advice columnists are not exempt and I am owed a great deal of overtime money.)

Rice says the laws get rather technical and are often misunderstood, by employers and employees.

"I would say as often as not that there are employers that simply don't understand the rules and misapply them," he says. "It's easy to get these things wrong."

A good source of information on this is the U.S. Department of Labor's website.

Rex Huppke writes for the Chicago Tribune. Send him questions by email at rhuppke@tribune.com.