When is Overtime Pay Required?

Web Admin - Thursday, May 28, 2015

overtime pay in Illinois, Palatine employment lawyerOvertime pay is an important, but often complicated, issue that employers and employees sometimes have to resolve. For employees, receiving overtime pay is compensation for being asked to work a significant number of hours. However, employers often attempt to find ways, either by legal or, in extreme cases, illegal means, to avoid having to pay overtime compensation.

General Overtime Information

Under the Fair Labor Standards Act (FLSA) and Illinois law, an employee is entitled to overtime pay when he or she works more than 40 hours in a single workweek. The workweek is a fixed and regularly recurring period of 168 hours (seven consecutive 24-hour periods) and is defined by the employer. The workweek does not need to coincide with the calendar week. Instead, the workweek can begin on any day and at any time of the day. While the employer can make the workweek whatever he or she wishes, it is not permissible to average the number of hours worked over a period of two or more weeks.

Overtime pay is paid at a minimum of 150 percent of the employee’s hourly work rate (known as “time-and-a-half”) for the number of hours worked over 40 hours in a workweek. The FLSA does not place a maximum number of hours that an employee over the age of 16 may work in a workweek. Further, there is no provision for overtime pay for work performed on Saturdays, Sundays, or holidays, unless work performed on those days results in exceeding the 40-hour rule. Generally, overtime pay is paid on the regular payday for the period in which the wages were earned.

The FLSA provides for several exemptions from the requirement of overtime pay. Exempt from overtime pay are executives, administrative, professional, computer, and outside sales employees who earn over $455 per week. Determining whether an employee fits under one of these categories can be complex and requires examination of the specific work the employee performs. Under Illinois law, other types of workers are also exempt, including, but not limited to:

  1. - Any salesman or mechanic primarily engaged in the selling or servicing of automobiles, trucks or farm implements;
  2. - Agricultural workers; and
  3. - A crew member of any uninspected towing vessel operating in any navigable waters in or along the boundaries of Illinois.

An employee who believes that he or she is entitled to overtime pay can file a lawsuit claiming monetary damages or that requests an injunction that orders the employer to pay the overtime wages. If the employee’s lawsuit is successful, he or she may receive back-pay, as well as liquidated damages in an amount equal to the back-pay.

Help with Employment Issues

For more information or if you believe you have been improperly denied overtime pay, you should speak with an experienced Illinois employment law attorney with experience in employment law and overtime compensation. Our firm represents individuals throughout the northwest suburbs, including areas such as Arlington Heights, Palatine and Crystal Lake. 

Ken ApicellaAbout the Author: Attorney Ken Apicella is a founding partner of DGAA focusing in the areas of personal injury, employment, insurance coverage disputes, and civil litigation. Ken earned his J.D. from DePaul University College of Law in 1999. He has been named a SuperLawyers Rising Star and a Forty Illinois Attorneys Under Forty to Watch. Ken has written and lectured for the Illinois Institute for Continuing Legal Education and regularly serves as a moderator at Northwest Suburban Bar Association's Continuing Legal Education seminars.

Overtime Violations in Restaurants

Web Admin - Tuesday, May 27, 2014

illinois overtime violationsWage theft is an increasingly common practice in which employers deprive their workers of wages they are owed through practices like improperly logging their hours or simply failing to pay wages fully and promptly. The problem is serious enough that a report from the Center for Urban Economic Development at the University of Illinois at Chicago estimates that workers in Cook County lose more than one million dollars a day to the practice. One of the most common methods of wage theft is through the violation of overtime laws. Overtime in the restaurant industry is a particular problem because of how overtime rules interact with minimum wage provisions and the tip credit.

Understanding the Tip Credit

The tip credit is a specific exception to minimum wage law that allows employers to pay employees less than minimum wage on the assumption that the worker’s tips will make up the difference. Restaurants are one of the main industries that can take advantage of the tip credit because of their high percentage of tipped employees, such as servers and bartenders.

The exact amount of the tip credit varies by state. In Illinois, employers may deduct up to 40 percent of the Illinois minimum wage as tip credit, giving a new minimum wage of $4.95. The tip credit is a complex piece of the minimum wage law that can give rise to a variety of violations by employers. One of the most complicated of these issues related to the tip credit is how it interacts with overtime law.

The Tip Credit and Overtime

Generally speaking, overtime laws require employers to pay their workers one and a half times their hourly wage for working more than 40 hours in a week. However, restaurants and other employers can still take advantage of the tip credit. Unfortunately, many do so incorrectly. The issue is that many employers take the tip credit out before multiplying the hourly wage by one and a half, when they should take it out after. To illustrate the difference, suppose a server works 60 hours in one week and is paid $4.95 an hour plus tips.

For the first 40 hours, the employer can simply pay the $4.95, but for the last 20 they need to start paying overtime. The incorrect way to do the calculation would be to simply multiply the $4.95 wage by 1.5 giving a new wage of $7.43, which would result in a paycheck of $148.60 for those 20 hours. The proper way to perform the calculation is to multiply the full minimum wage, $8.25, by 1.5 to get $12.38, and then subtract the tip credit afterwards to get a minimum wage of $9.08 and a paycheck of $181.60, a serious difference from the incorrect calculation.

If you believe you have been the victim of an overtime violation, contact an Illinois employment lawyer today. Our firm helps clients in many towns across the northwest suburbs, including in Palatine, Barrington, and Schaumburg.

About the Author: Attorney Ken Apicella is a founding partner of DGAA focusing in the areas of personal injury, employment, insurance coverage disputes, and civil litigation. Ken earned his J.D. from DePaul University College of Law in 1999. He has been named a SuperLawyers Rising Star and a Forty Illinois Attorneys Under Forty to Watch. Ken has written and lectured for the Illinois Institute for Continuing Legal Education and regularly serves as a moderator at Northwest Suburban Bar Association's Continuing Legal Education seminars.

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