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  1. #1
    WhiteFlag is offline Member
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    Are Employers Required to Pay Overtime?

    What is the name of your state (only U.S. law)? Michigan

    I recently started a job working as bookkeeper/office manager for a man who owns rental homes, strip malls, etc. There's A LOT of work that has to be done on a daily basis. He won't hire extra help, just expects me to do the work of three people. So, I'd been working a little overtime, however, I don't receive time and a half for anything over 40 hours.

    Is he obligated by (Michigan) law to pay hourly paid employees time and a half?

    WF
  2. #2
    cyjeff is offline Senior Member
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    Not if you are truly an office manager and are an exempt employee.
  3. #3
    WhiteFlag is offline Member
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    Quote Originally Posted by cyjeff View Post
    Not if you are truly an office manager and are an exempt employee.

    How does one determine whether they're 'exempt' or not? Does one's title determine that? I am a bookkeeper. I am an hourly paid employee. No medical, no paid vacations/sick days, no paid holidays.

    Thanks, Cyjeff.
  4. #4
    cyjeff is offline Senior Member
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    The Department of Labor has actually put together a kinda nifty little advisor...

    [url=http://www.dol.gov/elaws/esa/flsa/overtime/info.htm]elaws - FLSA Overtime Security Advisor[/url]

    Start there.

    I am guessing that you may fall into exempt status from an administrative standpoint.

    Go through the advisor and see. Perfect task for LABOR day weekend.

    Here is some of the stuff from that advisor...

    Fact Sheet #17C: Exemption for Administrative Employees Under the Fair Labor Standards Act (FLSA)

    This fact sheet provides general information on the exemption from minimum wage and overtime pay provided by Section 13(a)(1) of the Fair Labor Standards Act as defined by Regulations, 29 CFR Part 541.

    The FLSA requires that most employees in the United States be paid at least the federal minimum wage for all hours worked and overtime pay at time and one-half the regular rate of pay for all hours worked over 40 hours in a workweek.

    However, Section 13(a)(1) of the FLSA provides an exemption from both minimum wage and overtime pay for employees employed as bona fide executive, administrative, professional and outside sales employees. Section 13(a)(1) and Section 13(a)(17) also exempt certain computer employees. To qualify for exemption, employees generally must meet certain tests regarding their job duties and be paid on a salary basis at not less than $455 per week. Job titles do not determine exempt status. In order for an exemption to apply, an employee’s specific job duties and salary must meet all the requirements of the Department’s regulations.

    See other fact sheets in this series for more information on the exemptions for executive, professional, computer and outside sales employees, and for more information on the salary basis requirement.

    Administrative Exemption

    To qualify for the administrative employee exemption, all of the following tests must be met:

    The employee must be compensated on a salary or fee basis (as defined in the regulations) at a rate not less than $455 per week;
    The employee’s primary duty must be the performance of office or non-manual work directly related to the management or general business operations of the employer or the employer’s customers; and
    The employee’s primary duty includes the exercise of discretion and independent judgment with respect to matters of significance.

    Primary Duty

    “Primary duty” means the principal, main, major or most important duty that the employee performs. Determination of an employee’s primary duty must be based on all the facts in a particular case, with the major emphasis on the character of the employee’s job as a whole.

    Directly Related to Management or General Business Operations

    To meet the “directly related to management or general business operations” requirement, an employee must perform work directly related to assisting with the running or servicing of the business, as distinguished, for example from working on a manufacturing production line or selling a product in a retail or service establishment. Work “directly related to management or general business operations” includes, but is not limited to, work in functional areas such as tax; finance; accounting; budgeting; auditing; insurance; quality control; purchasing; procurement; advertising; marketing; research; safety and health; personnel management; human resources; employee benefits; labor relations; public relations; government relations; computer network, Internet and database administration; legal and regulatory compliance; and similar activities.

    Employer’s Customers

    An employee may qualify for the administrative exemption if the employee’s primary duty is the performance of work directly related to the management or general business operations of the employer’s customers. Thus, employees acting as advisors or consultants to their employer’s clients or customers — as tax experts or financial consultants, for example — may be exempt.

    Discretion and Independent Judgment

    In general, the exercise of discretion and independent judgment involves the comparison and the evaluation of possible courses of conduct and acting or making a decision after the various possibilities have been considered. The term must be applied in the light of all the facts involved in the employee’s particular employment situation, and implies that the employee has authority to make an independent choice, free from immediate direction or supervision. Factors to consider include, but are not limited to: whether the employee has authority to formulate, affect, interpret, or implement management policies or operating practices; whether the employee carries out major assignments in conducting the operations of the business; whether the employee performs work that affects business operations to a substantial degree; whether the employee has authority to commit the employer in matters that have significant financial impact; whether the employee has authority to waive or deviate from established policies and procedures without prior approval, and other factors set forth in the regulation. The fact that an employee’s decisions are revised or reversed after review does not mean that the employee is not exercising discretion and independent judgment. The exercise of discretion and independent judgment must be more than the use of skill in applying well-established techniques, procedures or specific standards described in manuals or other sources.

    Matters of Significance

    The term “matters of significance” refers to the level of importance or consequence of the work performed. An employee does not exercise discretion and independent judgment with respect to matters of significance merely because the employer will experience financial losses if the employee fails to perform the job properly. Similarly, an employee who operates very expensive equipment does not exercise discretion and independent judgment with respect to matters of significance merely because improper performance of the employee’s duties may cause serious financial loss to the employer.
    Educational Establishments and Administrative Functions

    The administrative exemption is also available to employees compensated on a salary or fee basis at a rate not less than $455 a week, or on a salary basis which is at least equal to the entrance salary for teachers in the same educational establishment, and whose primary duty is performing administrative functions directly related to academic instruction or training in an educational establishment. Academic administrative functions include operations directly in the field of education, and do not include jobs relating to areas outside the educational field. Employees engaged in academic administrative functions include: the superintendent or other head of an elementary or secondary school system, and any assistants responsible for administration of such matters as curriculum, quality and methods of instructing, measuring and testing the learning potential and achievement of students, establishing and maintaining academic and grading standards, and other aspects of the teaching program; the principal and any vice-principals responsible for the operation of an elementary or secondary school; department heads in institutions of higher education responsible for the various subject matter departments; academic counselors and other employees with similar responsibilities. Having a primary duty of performing administrative functions directly related to academic instruction or training in an educational establishment includes, by its very nature, exercising discretion and independent judgment with respect to matters of significance.

    Highly Compensated Employees

    Highly compensated employees performing office or non-manual work and paid total annual compensation of $100,000 or more (which must include at least $455 per week paid on a salary or fee basis) are exempt from the FLSA if they customarily and regularly perform at least one of the duties of an exempt executive, administrative or professional employee identified in the standard tests for exemption.

    Where to Obtain Additional Information

    For additional information, visit our Wage and Hour Division Website: [url=http://www.wagehour.dol.gov]U.S. Department of Labor - Wage and Hour Division (WHD) - About WHD[/url] and/or call our toll-free information and helpline, available 8 a.m. to 5 p.m. in your time zone, 1-866-4USWAGE (1-866-487-9243).

    When the state laws differ from the federal FLSA, an employer must comply with the standard most protective to employees. Links to your state labor department can be found at [url=http://www.dol.gov/contacts/state_of.htm]Error 404[/url].

    This publication is for general information and is not to be considered in the same light as official statements of position contained in the regulations.
    Last edited by cyjeff; 09-05-2010 at 09:34 AM.
  5. #5
    pattytx is offline Senior Member
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    There are very few exceptions in which exempt employees can be legally paid on an hourly basis and, based on what I know about what you do, you are not one of them. The fact that you are being paid hourly, with what you do, automatically makes you nonexempt.

    Yes, you must be paid overtime when you work over 40 hours in a workweek. How long has this been occurring? Do you work over 40 hours nearly every week? When you ask the employer why you are not getting overtime pay, what reason are you given?
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    You have not won the law suit lottery; in fact, you haven't even won the law suit scratch-off.
  6. #6
    WhiteFlag is offline Member
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    Thank you so much for the information, Cyjeff. I really appreciate it.

    WF
  7. #7
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    pattytx is most correct

    Quote Originally Posted by pattytx View Post
    There are very few exceptions in which exempt employees can be legally paid on an hourly basis and, based on what I know about what you do, you are not one of them. The fact that you are being paid hourly, with what you do, automatically makes you nonexempt.

    Yes, you must be paid overtime when you work over 40 hours in a workweek. How long has this been occurring? Do you work over 40 hours nearly every week? When you ask the employer why you are not getting overtime pay, what reason are you given?
    this is the best evidence that you are non-exempt; employers cannot have it both ways
  8. #8
    WhiteFlag is offline Member
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    Quote Originally Posted by pattytx View Post
    Yes, you must be paid overtime when you work over 40 hours in a workweek. How long has this been occurring? Do you work over 40 hours nearly every week? When you ask the employer why you are not getting overtime pay, what reason are you given?
    Thank you, Patty. I began this job a little over a month ago. This man just doesn't want to pay the going rate for proper help. His office is a disaster. I have a tremendous amount of 'clean-up' work to do in his QuickBooks before I can get that office running efficiently.

    I worked an hour and a quarter of overtime last week. When I realized he didn't pay me time and a half I asked him about it. He told me he doesn't pay time and a half. So I told him that I can't work over 40 hours then. He then told me that I should take the hours I work overtime this week and tack them onto next weeks schedule. LOL!

    This wouldn't be such an issue if I weren't also working a second job. I've been working 7 days a week and am exhausted. I don't dare let go of my part time job because I am paid what I'm worth. On the other hand, I'm looking for a new second job.

    WF
  9. #9
    pattytx is offline Senior Member
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    Gee, SuperLitigator said I was correct. I'm so flattered. I've only been in wage and hour compliance as part of my job, for over 20 years.

    "I don't pay overtime"? "Add it on to next week"? I don't think so.

    In any other economic times, my response would be "You don't pay overtime, I don't work overtime". However, I understand that in this job market, and with your state having the highest unemployment rate in the nation (if I remember correctly), that you might be reluctant to do that, in fear of being fired.

    Is he at least paying the straight-time portion of the overtime or none of it at all? Are you recording the actual hours worked on your time sheet/card or has he instructed you to not report more than 40 hours?

    Keep an accurate record of your work hours at home; a paper notebook is fine.

    Do the best you can and as you walk out the door to your next full-time job, go immediately to the Internet and file a wage claim for the unpaid overtime. You have three years in Michigan to file such a claim.
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    You have not won the law suit lottery; in fact, you haven't even won the law suit scratch-off.
  10. #10
    cyjeff is offline Senior Member
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    Personal aside.

    I thought the method of payment... stated as hourly or salary... had nothing to do with exempt status.

    I thought it was around, instead, the work being done.

    I pull a salary. If my company wanted, they could tell me what that was in hours.

    As long as other aspects of my employment remained the same (including how I can take PTO), I wouldn't change to non-exempt, right?
  11. #11
    cbg
    cbg is offline Senior Member
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    It is true that salaried and exempt are not synonyms as there are non-exempt employees paid on a salaried basis. There are, however, only extremely limited situations under which an exempt employee can be paid hourly. These limited exceptions include doctors, lawyers, teachers and some computer professionals; however, the chances that an office manager/bookkeeper is legitimately falling under any of these exceptions are pretty slim. So while an employee being paid on a salaried basis does not necessarily mean being exempt, an employee being paid hourly whose duties do not fall under the exceptions listed above is a pretty good indication that they are being treated as non-exempt.
  12. #12
    justalayman is offline Senior Member
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    what about the rest of the job patty? Would she qualify as exempt if not for the hourly pay?

    If so, and the OP meets the $455 or greater pay per week, all the boss would have to do is change the pay to salary and she works all the time he requires with no additional pay at all, right?
  13. #13
    cbg
    cbg is offline Senior Member
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    I'm not Patty, but there isn't enough detail to say. Titles mean very little; depending on how much independent judgement the office manager is allowed to exercise, it might or might not qualify. Bookkeepers almost always fall under non-exempt.
  14. #14
    WhiteFlag is offline Member
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    Quote Originally Posted by pattytx View Post
    "I don't pay overtime"? "Add it on to next week"? I don't think so.

    In any other economic times, my response would be "You don't pay overtime, I don't work overtime". However, I understand that in this job market, and with your state having the highest unemployment rate in the nation (if I remember correctly), that you might be reluctant to do that, in fear of being fired.

    Is he at least paying the straight-time portion of the overtime or none of it at all? Are you recording the actual hours worked on your time sheet/card or has he instructed you to not report more than 40 hours?

    Keep an accurate record of your work hours at home; a paper notebook is fine.

    Do the best you can and as you walk out the door to your next full-time job, go immediately to the Internet and file a wage claim for the unpaid overtime. You have three years in Michigan to file such a claim.
    Thank you, Patty. You've been very helpful.

    I do keep a time sheet. He asked me to re-write my time sheet to reflect a maximum of 40 hours per week. (He told me he'd pay me the overtime in cash. Yeah, he paid me straight time not time and a half.) Also, he's paying me $XX.XX on payroll and the rest of my hourly rate he gives me in cash. I told him a few days ago that I would prefer to have all of my wages on record. (I don't consider being paid cash 'a perk' which is how he was trying to present it to me.) Told him that I want to be able to qualify for a mortgage and must show all my earnings in order to do so.

    Currently I'm working this full time job and a part time job hence I log close to 60 hours a week as it is. I won't give up my part time job for this guy. He's too unstable and his staff turnover is very high. People leave once they find a job that actually pays a decent wage WITH benefits.

    This employer boasts that he can hire Indian children to work for fish heads rather than pay us what we're worth. It's no wonder his books are such a mess. He's thrown high school students on his computers to do his bookkeeping. Then when it gets closer to tax time he hires qualified people to untangle the mess. It's absolutely maddening.
    Last edited by WhiteFlag; 09-06-2010 at 06:27 PM.
  15. #15
    pattytx is offline Senior Member
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    Quote Originally Posted by WhiteFlag View Post
    Also, he's paying me $XX.XX on payroll and the rest of my hourly rate he gives me in cash. I told him a few days ago that I would prefer to have all of my wages on record and that I don't consider being paid cash 'a perk'. Told him that I want to be able to qualify for a mortgage and must show all my earnings in order to do so.
    So, what did he say to that?

    Let's see what other laws he's violating here as well. (BTW, paying in fish heads would be illegal as well.)

    IRS regulations, state Dept. of Revenue regulations, state unemployment regulations, state worker's comp requirements.

    Just more agencies you get to rat out this idiot to when you leave.
    ---------------------------------------------------------------------------------------------------------------------------------------------------------
    You have not won the law suit lottery; in fact, you haven't even won the law suit scratch-off.

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