People often ask this simple question, but the answer is frequently complex and requires a detailed review of several issues. Generally, these issues can be simplified into three simple areas: 1) How are you paid?; 2) How much are you paid?; and 3) What do you do?
One of the first questions that I ask all my clients is, “How are you paid?” Most people are paid an hourly rate, salary, piece rate, commission or some combination of these methods. Although this question may seem simple and straight forward, the complexities of state and federal law often make this question much more difficult to answer. Generally, people who receive an hourly rate or piece rate are entitled to overtime when they work more than 40 hours in a workweek. While some salaried and commissioned employees are not entitled to overtime pay, many salaried and commissioned workers should be paid overtime.
How much are you paid? According to the federal law, most workers are entitled to a minimum wage that is currently set at $7.25 per hour. If the employee is paid a fixed weekly amount (i.e. a salary) and not paid overtime, the salary must be at least $455 per week. If a worker is entitled to overtime, the overtime rate must be 1.5 times their “regular rate.” Where an employee is paid only an hourly rate, the hourly rate and the regular rate are the same. However, where a worker is paid a commission, bonus, piece rate or a salary, determination of the “regular rate” requires a bit more work.
Finally, I always ask my clients, “What do you do?” In order to determine whether or not an employee is entitled to overtime, it is generally important to understand what the worker’s core job functions/duties are, what responsibilities the employee has and what percentage of his or her time is spent performing each of the job functions.
Only after a qualified attorney analyzes the answers to these simple questions can you find out whether or not you are being paid fairly. If you would like to find out whether or not you are being paid fairly, contact me to schedule a free consultation.