Happy Holidays! This is a very special time of year but can feel chaotic across several industries. Restaurants and bars see some of their busiest years to date. Long-anticipated movies are finally being released and the theaters are packed. (Although I am excited for Wicked, I am even more excited for Sonic the Hedgehog 3). And of course, retail stores are busier than ever.
These industries are more often than not filled with hourly employees, who are considered “non-exempt” employees. But what does that mean?
Under the Fair Labor Standards Act (“FLSA”), employees are divided into two categories: exempt and non-exempt. Exempt employees are exempt from overtime requirements under the FLSA, meaning that your employer does not have to pay you extra if you work over 40 hours a week as an exempt employee. Your employer can elect to pay you extra for extra hours worked, but the law does not require it to. Exempt employees are fixed salary employees, subject to certain salary thresholds per job type. For example, for “white collar” employees, the salary is at least $844/week ($43,888 annually). This will be increased to $1,128/week ($58,656 annually) in January 2025. These thresholds are determined by the Department of Labor (and, therefore, are prone to political pressures). See the applicable tables set forth by the DOL at https://www.dol.gov/agencies/whd/overtime/salary-levels. Please note that this is subject to change.
To be considered a “white collar” employee, you must fit into “executive, administrative” or “professional” roles. Common examples include lawyers, accountants, or software engineers. So, if you have a particularly heavy week, you unfortunately are not entitled to time and a half. You do, however, have the assurance of a steady, predictable salary every week.
Non-exempt employees, however, are not exempt from the full protections under the FLSA. These are hourly employees or employees who make below the salary thresholds set forth by the Department of Labor, as discussed earlier. These employees must be paid a rate of 1.5 times their regular hourly rate for every hour worked over 40 hours in a week. That means a minimum wage worker making $7.25 must be paid $10.875 for every overtime hour.
For example, if you are making minimum wage working the concession stand at the movie theater, but you work 50 hours the week Wicked is released, you must be paid $7.25 for the first 40 hours for a total of $290, and then $10.875 for hours 41-60 for another $217.50. In total, you must be paid $507.50 for the week.
It is important to note that you are not entitled to work overtime by law. However, if you do work overtime, you must be paid accordingly by law. However, if you notice that you are being retaliated against after engaging in protected activity by having your hours cut, you may still be protected.
During this holiday season, be grateful to the non-exempt employees who are working extra hard so that you can enjoy yourself during the most wonderful time of the year. Also . . . tip your servers.
Are you a non-exempt employee who has not been paid appropriately under the law? Contact me in Dallas today or one of my talented colleagues in Houston or Austin for a consultation.