New Labor Rules Bring Overtime Pay To Millions Of Salaried Employees

Let’s say you’re an assistant manager at a fast-food restaurant making a salary of $35,000 per year. Your restaurant is drastically understaffed, and even though you work up to 20 hours of overtime per week, you don’t receive any additional compensation for the extra hours. Is this OK?

Somewhere between 4.5 and 12.5 million Americans find themselves in a similar situation every week. Under the current Fair Labor Standards Act, salaried workers making more than $23,660 per year are not eligible for overtime pay if their jobs include some traditionally “white collar” duties (such as restaurant management).

New rules announced on May 18 by the Department of Labor will change that. Starting December 1, 2016, salaried employees who make less than $47,476 per year will be eligible for time-and-a-half overtime pay when they work more than 40 hours in a week. The new rules also include a system that will automatically increase the salary threshold every three years, meaning that, in the future, even more employees will qualify for overtime pay.

To comply with the new regulations, your employer may choose to do one of three things:

  1. Your employer may begin paying you time-and-a-half for your overtime.
  2. Your employer may raise your salary above $47,476.
  3. Your employer may limit the amount of hours you can work to 40 hours per week, increasing the amount of time you have to spend with family or on additional training.

Importantly, if you currently earn regular bonuses or performance incentives, your employer may choose to use that money to satisfy up to 10 percent of your new overtime pay.

If you are a salaried employee and are not used to keeping track of your hours, you may have questions about how your wages will be paid after December 1. You should seek the advice of counsel to determine whether you are eligible for overtime pay, and when the time comes, whether your employer is compliant with the new rules.

 

LET’S TAKE FIVE: An Overview of Kentucky’s Work and Lunch Break Laws

We’ve all had those long, grueling days on the job before. The work keeps coming, the deadline is inching closer and closer, and your boss is getting increasingly frantic about getting everything done. How do you handle that situation? Do you skip lunch to meet that deadline? Do you just keep working and working until everything is completed? More importantly, is your employer allowed to make you do those things to ensure that the job gets finished?

Fortunately for Kentucky workers, the answer is oftentimes no.

The provisions of Chapter 337 of the Kentucky Revised Statutes were enacted by the Kentucky legislature to ensure that workers in this state would be able to work under reasonable conditions. There are two provisions in the Act that deal with lunch breaks and rest periods specifically — KRS 337.355 and KRS 337.365, respectively. In addition, a number of regulations have been promulgated by the Kentucky Labor Cabinet that focus on lunch breaks and meal periods. At your workplace, you may have noticed a poster placed somewhere on-site that highlights your rights as a worker. Those rights are provided through these statutes and regulations.

Lunch Breaks

A lunch break is a period of time when an employee is completely relieved of his or her duties, and given a reasonable period of time for eating a meal. A meal period is different from a rest period in that employees do not have to be compensated while on break. However, if an employee is required to perform any duty, whether active or inactive, while eating, he or she is not considered to be on a lunch break, and must still be compensated for that time.

In Kentucky, employers are required to allow their employees a reasonable lunch break between the 3rd and 5th hours of an employee’s shift. The statute doesn’t define what a “reasonable” lunch break is, or how long it should last, but the Kentucky Labor Cabinet (the agency responsible for enforcing wage and hour laws) has suggested that in most circumstances, 30 minutes or longer qualifies as a reasonable lunch break. However, the Cabinet has also stated that the reasonableness of a lunch period is dependent upon the circumstances of that break. Under special conditions, a lunch break shorter than 30 minutes may be reasonable.

If an employer is a minor under the age of 18, however, Kentucky law mandates that employers provide a lunch break of no less than 30 minutes for every five hour period of time the minor has worked.

Rest Periods

Rest periods are short breaks in between working time. In Kentucky, employers are required to provide at least one 10 minute break for every 4 hours worked by their employees. These rest periods must be compensated for, and are to be taken in addition to lunch breaks. The Labor Cabinet has also stated that these breaks cannot be offset against waiting periods or on-call time.

For example, if you work at a factory and a machine that you use has broken down, you necessarily have to wait for the machine to be repaired before you can resume working. This is a waiting period, and you are considered to be on-duty because, under these circumstances, you are being engaged by your employer to wait for the machine’s repairs. This is compensable time, similar to a rest period. However, this time cannot be considered by an employer to be a rest period. No matter how long the wait, a separate rest period should still be given once the 4 hour mark has been reached.

The same is true if you are working on-call. In this context, being “on-call” entails being required to remain close enough to your workplace that you can’t effectively go about your personal business. For anyone working on-call under those circumstances, that on-call time cannot be treated as a rest period.

Remedies for not Receiving Lunch Breaks or Rest Periods

If you’ve been placed in the unfortunate situation of being denied your statutorily required lunch or rest periods, you’ve got a couple of options. First, you may report the matter to the Department of Workplace Standards, Division of Employment Standards, which has been delegated by the Kentucky legislature the authority to investigate and adjudicate violations of the lunch break and rest period provisions of the Chapter 337. The Division of Employment Standards administer administrative hearings in which penalties can be assessed to employers who have failed to provide the required breaks for their employees.

Second, you may also file a claim against your employer with either the Kentucky court system, or in certain circumstances, the Federal court system. The Western District of Kentucky has held that employees who have been denied their break periods have a private cause of action to recover damages for violation of the Chapter 337.

If you believe that you have been denied the breaks guaranteed to you by Kentucky law, you should seek help. Even administrative claims filed with the Labor Cabinet involve a fair amount of legal complexity, and the assistance of counsel is a great asset to have when going through such a process.