Fair Labor Standards Act overtime rules
Overview of FLSA Overtime Provisions:
The FLSA, enacted in 1938, establishes minimum wage, overtime pay, recordkeeping, and child labor standards.
Under 29 U.S.C. § 207(a)(1), non-exempt employees must receive overtime pay at one and one-half times their regular rate for hours worked over 40 in a workweek.
The Act provides exemptions for certain employees based on their job duties, salary levels, and industries.
The Department of Labor (DOL) issues regulations interpreting these rules, especially the “white-collar exemptions” for executive, administrative, professional, outside sales, and certain computer employees.
Courts play a major role in defining the scope of exemptions and what constitutes “work” or compensable time.
Key Elements of FLSA Overtime Rules:
Who is entitled to overtime?
Most hourly workers.
Some salaried workers unless exempt.
Exemptions from overtime:
Executive, administrative, and professional employees (the “white-collar exemptions”).
Outside sales employees.
Certain computer professionals.
Highly compensated employees above salary thresholds.
Regular rate calculation:
Includes all remuneration except discretionary bonuses, gifts, and certain benefits.
What counts as hours worked?
All time the employee is required to be on duty or on the employer’s premises.
Includes some “off the clock” activities if controlled by employer.
Key Case Law on FLSA Overtime Rules
1. Anderson v. Mt. Clemens Pottery Co., 328 U.S. 680 (1946)
Facts: Workers claimed unpaid overtime for time spent walking between workstations and changing clothes.
Issue: What constitutes compensable “work” time under FLSA?
Holding: The Supreme Court ruled that all time spent for the employer’s benefit, including preparatory and postliminary activities integral to the job, is compensable.
Explanation: Established the “principal activities” test and shifted burden to employers to keep accurate records.
Significance: Broad interpretation of compensable time, making it easier for workers to claim overtime.
2. Overnight Motor Transportation Co. v. Missel, 316 U.S. 572 (1942)
Facts: Drivers challenged employer’s practice of paying for only driving time.
Issue: Whether waiting time between assignments is compensable.
Holding: Waiting time is compensable if it is controlled by the employer and the employee cannot use it effectively for personal purposes.
Explanation: Clarified that time employees are engaged to wait counts as working time.
Significance: Expanded what counts as compensable hours for overtime purposes.
3. Christopher v. SmithKline Beecham Corp., 567 U.S. 142 (2012)
Facts: Pharmaceutical sales representatives classified as outside sales employees claimed overtime.
Issue: Are pharmaceutical sales reps exempt from overtime under the “outside sales” exemption?
Holding: The Court held the reps qualify for the exemption because their job duties involved “making sales” despite some promotional activities.
Explanation: Narrowed the application of exemptions based on the specific statutory language and DOL regulations.
Significance: Affirmed employer-friendly interpretation of exemptions, limiting overtime claims by sales reps.
4. Encino Motorcars, LLC v. Navarro, 579 U.S. 211 (2016)
Facts: Service advisors at a car dealership claimed overtime; employer claimed exemption under FLSA’s “salesman” exemption.
Issue: Are service advisors exempt from overtime as “salesmen” under the Act?
Holding: The Supreme Court ruled service advisors are exempt because their primary duty is obtaining sales.
Explanation: Court emphasized deference to DOL regulations and plain statutory language.
Significance: Clarified scope of exemptions and emphasized the importance of agency interpretations.
5. Perez v. Mountaire Farms, Inc., 650 F.3d 350 (4th Cir. 2011)
Facts: Workers at a poultry plant claimed unpaid overtime for donning and doffing protective gear.
Issue: Is time spent changing clothes and putting on protective gear compensable?
Holding: The court held that this time is compensable under the FLSA because it is integral and indispensable to principal work activities.
Explanation: Reinforced the Anderson standard on what constitutes compensable “work.”
Significance: Workers must be compensated for safety-related preparatory activities.
6. IBP, Inc. v. Alvarez, 546 U.S. 21 (2005)
Facts: Meatpacking workers claimed time spent waiting and donning protective gear was compensable overtime.
Issue: Is time spent donning and doffing protective gear compensable under FLSA?
Holding: The Supreme Court held that such time is compensable.
Explanation: Reiterated the principle that activities integral and indispensable to principal work must be compensated.
Significance: Expanded compensable activities, increasing employer liability for overtime.
Summary:
| Aspect | Key Principles | Leading Cases |
|---|---|---|
| Compensable Work Time | Includes all time for employer benefit | Anderson v. Mt. Clemens Pottery; IBP v. Alvarez |
| Waiting Time | Compensable if controlled by employer | Overnight Motor Transportation Co. v. Missel |
| Exemptions (Outside Sales) | Narrow interpretation; depends on job duties | Christopher v. SmithKline; Encino Motorcars |
| Protective Gear Time | Integral and indispensable to work = compensable | Perez v. Mountaire Farms; IBP v. Alvarez |
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