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Horton Law Firm Blog Overtime Law: Basic Considerations under the Fair Labor Standards Act (FLSA)

Overtime Law:  Basic Considerations under the Fair Labor Standards Act (FLSA)

The Fair Labor Standards Act (FLSA) requires that employers pay employees a minimum wage and an overtime premium of 1.5 times the regular hourly rate for all hours worked in excess of 40 hours. But how do you know if the FLSA’s protections apply to you, the employee? Here are the five initial questions to ask if you believe you are considering seeking legal counsel on minimum wage or overtime law violations.

(1) Are you an “employee”?

The FLSA applies to employees, not independent contractors. Employers often try to define employees as independent contractors so that they do not have to pay overtime or minimum wage. The FLSA applies to workers who qualify as employees under the “economic realities test,” which looks at the permanency of the employment, the degree of control that the employer exercises over the employee, and whether the employee is in a distinct business for himself (like an independent contractor), among other criteria.

(2) Does the FLSA apply to your employer?

The FLSA does not apply to all employers, but only those employers who meet one of two types of coverage: enterprise coverage or individual coverage. Enterprise coverage applies to employers who either (1) have $500,000 in gross annual sales AND has two or more employees engaged in interstate commerce. Individual coverage deals with the duties of the EMPLOYEE: does the employee engage in interstate commerce on a regular basis or produces goods for interstate commerce? If so, that employee is covered by the FLSA.

(3) Are you, as the employee, exempt from the FLSA?

Even if you are an employee and the FLSA applies to you and your employer, there still is the possibility that the employee is EXEMPT from the FLSA’s protections and thus not entitled to minimum wage or overtime. An employee can be exempt under three different classifications: executive, administrative, or professional. To be exempt from overtime pay, the employee must (1) be paid on salary of at least $455 a week (which may go up under the current Administration’s direction) AND (2) have duties that are characterized by professional, executive, or administrative responsibilities. Does the employee supervise other employees, interview and train other employees, discipline or fire employees? That employee is probably under the executive exemption. Does the employee perform office or non-manual labor related to the management or operations of a company with the ability to exercise discretion in decision making? Probably administrative exemption. Lawyer, doctor, accountant, baseball player? Professional exemption.

(4) What are you entitled to be paid under the FLSA?

Assuming that you are covered the FLSA, what is your employer required to pay you for minimum wage and overtime? Minimum wage in South Carolina is set by the FLSA at $7.25/hr. Tipped employees can be paid as little as $2.13/hr, so long as the $2.13 and tips equate to at least $7.25/hr. By law, overtime must be paid at the rate of 1.5 the regular hourly rate of pay for all hours worked over 40 per workweek. This rule applies even if the employee is paid on “salary,” and the hourly rate can be calculated for salaried employees by dividing the salary amount by the number of hours that the salary is intended to compensate (example: $400 a week in salary divided by 40 hours a week equals an hourly rate of $10/hr, so overtime rate is $15, or 1.5 times $10/hr.). Oftentimes an employer will pay a person a low “salary” and tell the employee that he or she doesn’t get overtime because the employee is “on salary,” but just being on salary is not sufficient to exempt an employee from overtime pay (see point 4 above).

(5) What are the possible legal damages if my case goes to trial?

If your employer has failed to comply with the FLSA’s requirements, it can be sued in state or federal court. And if you win, you are entitled to back pay, possibly liquidated damages (double your back pay amount), attorneys’ fees, and costs.


If you are covered under the protections of the FLSA and your employer refuses to comply with the law, you should schedule a consultation with our office today to review your case. You worked for it, and you deserve to be paid for it. Don’t sit on your rights and allow your employer to get away with wage theft.

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