Most employees do have a right to overtime pay, when they work over 40 hours in a given week. For each overtime hour, the law requires that they get one-and-one-half times their regular pay.
The law requiring overtime pay -- called the “Fair Labor Standards Act” -- was passed in 1938, during the Great Depression, when jobs were scarce. The idea was that making overtime hours more expensive for companies would encourage them to hire more workers rather than work their current employees longer hours.
While the law applies broadly to most employees, it does not give everyone a right to overtime pay.
First, the law only applies if you are an “employee.” That means that if you are an independent contractor in business for yourself, you have no right to overtime pay.
How do you know whether you are an employee or an independent contractor? It’s not always an easy question to answer. It depends on the type of job you do.
In the eyes of the law, you are more likely an employee, rather than an independent contractor, if:
- You have a “permanent” job with your company, rather than one with an end date
- You get trained or instructed by the company on how to do your job, and are supervised in how you do it
- Your work schedule is set by the company
- You work on the company’s premises
- The work you do is central to the company’s business (for example, you work for a bakery and your job is baking the bread)
- You do the same job done by employees of the company.
But these are just some factors that may be relevant. Ultimately, the question is whether you are in business for yourself (and thus an independent contractor) or you depend for your livelihood on the company you work for (and are thus an employee).
Note that just because your company may call you an independent contractor doesn’t mean you are one. Companies often improperly label workers who are employees as independent contractors -- doing so can save them a lot in taxes and benefits. There’s a long list of employees who have been improperly labeled as independent contractors: real estate agents, delivery drivers, ambulance dispatchers, nurses working for a health care service, temps working for an employment agency, even dancers at a night club.
But even if you are an employee, as opposed to an independent contractor, that’s not the end of the story. You may still have no right to overtime pay if you fall into one of the many loopholes contained in the Fair Labor Standards Act.
For example, if you are a manager who spends most of your time supervising others, or if you spend most of your time performing important administrative work related to the operation of the business, you may fall into the law’s “executive” or “administrative” exceptions. If you do, you have no right to overtime pay. But just because you may have the word “manager” in your job title and your employer doesn’t pay you overtime, doesn’t mean you don’t have a legal right to overtime pay. Assistant managers or office managers, for example -- depending on their job duties -- may be legally entitled to overtime pay.
The law also denies overtime pay to “professional” employees. This “professional” exemption generally applies to people whose jobs require long years of extra schooling -- such as doctors, lawyers and accountants -- or whose jobs require artistic creativity or talent -- such as painters or musicians. But having a college degree or using your talents on the job doesn’t necessarily deprive you of the right to overtime pay. For example, courts have found newspaper reporters to be entitled to overtime pay despite their education and their writing skills.
Another important loophole exists for what the law refers to as “outside” sales reps -- those workers who spend most of their time on the road, visiting customers. This exception, however, is limited. For example, it does not apply to a delivery driver whose primary duty is driving, as opposed to selling. Nor does it apply to pharmaceutical “sales” reps who visit doctors offices promoting certain drugs, but who don’t actually sell the drugs to the doctors.
Even if you fall into one of the exceptions to the Fair Labor Standards Act, which is a federal law, you may still have a right to overtime pay under the law of your state. For example, certain states require overtime pay for long-distance trucker drivers, even though federal law does not.
While most employees have a legal right to overtime pay, it may be difficult to tell in a given situation whether a person has such a right. You can’t necessarily rely on what your company says. The question will often require an independent analysis of the nature of your job and of the requirements of the law.