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by Barbara Kate Repa | March 31, 2009

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Under current laws, the strict but confusing rules on overtime entitle about 75 million workers to overtime pay for hours they work over 40 in a week.

The notion of paying a premium for overtime workhours harkens back to the 1930s, when employers were encouraged to hire more workers rather than pay high rates to a select few.

But these days, a growing number of people claim that overtime pay is an anachronism.

Many employers, oblivious to or unmindful of overtime pay strictures, routinely deny workers the extra pay they have coming. Few of them get caught. The Labor Department currently collects only about $100 million a year in back overtime--a small drop in its oversize bucket.

But those that do get caught by the Department of Labor pay dearly. Employees lose their exempt status, which means they must be paid overtime--and they must be paid any overtime pay due them during the last two years.

Some employers unwittingly become liable for large overtime claims by putting conditions on exempt, salaried employees. Some courts have held, for example, that executive employees who are suspended without pay or docked for taking partial days off have been treated as non-exempt workers and so become entitled to overtime pay and other benefits guaranteed by the FLSA.

Many employees, citing increased difficulties with balancing time between work and personal lives, say they would prefer more flexibility over more take-home pay. Restructuring proposals which also have the support of many small business organizations include the plan to abandon the 40 hour workweek. If, for example, entitlement to overtime was based on a two-week, 80-hour work schedule, an employee would be free to work 75 hours in one week and a mere five the next without being entitled to overtime pay.

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Filed Under: Workplace Issues
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