Federal Pay Laws for Overtime
- Overtime laws are administered by the Department of Labor.CLOCK image by SKYDIVECOP from Fotolia.com
In the early 1900s, American workers had meager legal protection. There were few standards set for wages and hours and even less enforcement. There was no government agency dedicated solely to the issues of labor and pay. The 20th century saw the creation of agencies and laws that established standards and enforcements for workers' rights. - Established in 1869, the Massachusetts Bureau of Labor statistics was the first labor statistics bureau ever created.
Twelve other states had established similar boards by 1883, but a national organization would not be created until 1884, with the debut of the Federal Bureau of Labor. Democratic congressmen repeatedly attempted to create a cabinet level department of labor, feeling a bureau wasn't powerful enough. Outgoing President William Taft signed the bill creating the Department of Labor as one of his last acts of office in 1913. (See Reference 1) - In 1938, the Fair Labor Standards Act was passed into law. It established national standards for minimum wage, child labor and maximum hours of a workweek. It also established guidelines for the definition of and pay requirements for overtime. The act is administered by the Wage and Hours Division of the Department of Labor.
- The FLSA defines overtime as work done in a workweek in excess of 40 hours. The overtime pay rate must be 1 1/2 times that of the normal pay rate. Employees making $10 an hour for regular pay are due $15 for an hour of overtime. According to the Department of Labor, overtime for workers who are paid based on a piece rate is calculated "by dividing the total weekly earnings by the total number of hours worked in that week. The employee is entitled to an additional one-half times this regular rate for each hour over 40, plus the full piecework earnings."
- By having national standards of overtime definition and calculation, there is no guesswork on the part of the employee or employer. The Wage and Hours Division of the Department of Labor enforces and administers the FLSA for local and state government employees, some federal employees and employees in the private sector.
- Some types of employees are not eligible for overtime pay. This exemption applies to farmworkers employed on small farms, employees of motion picture theaters, certain commission employees of service or retail organizations, domestic servants living in their employer's residence, seamen employed on foreign vessels and newspaper delivery people, among others.
