There is a common misconception that because you are paid on a salary or commission basis, you are not entitled to overtime pay. Many employees are either told, or believe, that because they have the title of “manager” or “assistant manager” and are paid a salary, they are not entitled to overtime. This is often untrue. Both state and federal law requires the payment of overtime (one and one half times your regular rate of pay), for all hours worked in excess of 40 hours per week unless very specific and rigorous criteria are met. Some states, including California and Nevada, require the payment of overtime for all hours worked in excess of 8 hours a day.
Employers don’t want you to know that the payment of overtime compensation equal to one and one half times your regular rate of pay is the rule and not being paid overtime for hours worked in excess of 8 hours a day or 40 hours a week is the exception.
Am I entitled to overtime even though I am paid a set salary or have the title of Manager?
Being paid on a salary or commission basis or being called some kind of “manager,” “supervisor,” or “administrator” is irrelevant under both state and federal law for determining whether an employee is entitled to overtime pay. There are very limited exceptions to the general rule that employees are entitled to overtime pay for all hours worked in excess of 8 hours a day or 40 hours a week. Call us for a free case evaluation to determine if you are eligible for overtime pay.
Common examples of misclassified employees who are entitled to overtime include:
- Salaried retail positions;
- Salaried positions in the restaurant or fast food industry;
- Sales and/or delivery positions;
- Computer or IT professional positions;
- Independent contractors;
- Bank, insurance and stock broker positions; and
- Insurance adjusters.
What is owed on overtime?
Both Nevada and California require the payment of one and one half times the employee’s regular rate of pay for all hours worked in excess of 40 hours per week or 8 hours per day. * (In order to receive daily overtime in Nevada, i.e., working over 8 hours per day, certain elements must be met.) If you work more than 40 hours per week and your employer has not been paying you overtime, you may be entitled to thousands of dollars of overtime pay. Call us for a free case evaluation to determine if you are eligible for overtime pay.
Since I am paid a salary, how do I determine the amount I am owed for overtime?
The basic formula for calculating overtime in California and Nevada is as follows:
- Divide your yearly salary by 52 in order to obtain your weekly rate of pay ;
- Divide your weekly rate of pay by 40 (hours) to obtain your hourly rate;
- Multiply the hourly rate by 1.5 in order to obtain your hourly overtime rate of pay;
- Multiply the number of hours worked each week in excess of 40 by your hourly overtime rate of pay. This will yield them amount of overtime you are entitled to each week ;
- Multiply your weekly overtime by the number of weeks worked per year;
- Multiply that by the years worked (up to a maximum of four);
- Then add interest of 10% for each year.
For example, if you receive a salary of $20,800 per year, your weekly salary is $400 ($20,800 divided by 52 weeks). Your hourly rate of pay is $10 per hour ($400 divided by 40 hours). If you work 50 total hours per week, you are working 10 hours of overtime a week. On a weekly basis you are entitled to $150 of overtime pay (10 hours overtime at 1 and ½ times the hourly rate). On a yearly basis you are entitled to $7,800 ($150 x 52 weeks).
In a lawsuit, where you may recover for four years of unpaid overtime, your recovery could be $31,200, plus 10% interest per year, as well as waiting time penalties equal to 30 days worth of pay. In Nevada, you may only recover for three years worth of unpaid overtime as opposed to four years in California.
Federal law differs from state law with respect to the eligibility for overtime and how overtime is compensated. Call us today to for a free initial case consultation to determine if you are entitled to unpaid overtime under state or federal law.
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