TAKING CARE OF BUSINESS…And Working Overtime in Kentucky

The basics of overtime compensation are pretty well-known to most workers:  “time-and-a-half,” working over 40 hours in a week, etc.  But do you know what kinds of workers are entitled to overtime pay?  What about the workers who aren’t?  Can you max out overtime pay?  Are salaried employees eligible for overtime compensation?  This article will help you understand how overtime works in Kentucky, and what you can do if you’ve been denied overtime pay by your employer.

Overtime pay is dictated by either the Fair Labor & Standards Act (the “FLSA”) for federal claims, or through the provisions of Chapter 337 of the Kentucky Revised Statutes for state claims.  The two sets of legislation are similar in purpose and design, but vary slightly with regards to their structure, and in some cases, their substantive content.  The use of one over the other for a claim depends on a number of circumstances that have to be weighed according to the individual facts of a case, but that is a discussion best left for another article.  For now, it is important to simply know that these statutes provide mandatory overtime for a majority of Kentucky workers, as well as measures for recovering overtime wages that have been withheld from them.

 

What is overtime pay?

KRS 337.285 requires that employees receive one-and-a-half times their normal pay rate for any time worked over forty hours during their normal work week.  This sounds like a fairly straightforward concept.  If you make $10/hr, then you would receive $15/hr for every hour worked over the 40 hour limit.  But when does a workweek start?  Is it simply every Monday through Friday?

 

The Kentucky Labor Cabinet has stated that the workweek can actually start on any given day, at any given hour.  It is any period of 7 consecutive 24 hour days, and each week stands alone for purposes of overtime compensation.  For example, suppose you were to work 30 hours one week and 50 hours the next.  Despite the fact that the total hours for both week amount to 80 hours, and therefore are the equivalent of 40 hours per week, your employer would still be required to pay you overtime for the 10 extra hours you worked on the second week.

 

How is overtime calculated?

For hourly workers, calculating overtime is pretty easy — whatever your hourly pay is, add half.  But for salaried, piece rate, or flat fee workers, there is a bit more math involved.

 

Salary

For salaried workers, the pay rate is usually set at either week, month, or year.

 

Overtime for weekly salaries is calculated by dividing the weekly pay by the number of hours worked to arrive at your hourly rate, and then adding half to that figure.  E.g., your salary is $200/week.  Divided by 40 hours, your hourly rate of pay would be $5.  Therefore, you should be compensated $7.50 for each hour worked over 40 hours.

 

For monthly salaries, you would determine what your salary would be for an entire year, and then divide by the number of weeks in a year, 52.  E.g., your salary is $1000/month.  Multiplied by 12, your annual pay would amount to $12,000.  Dividing that by 52, your weekly pay would be roughly $230.  That number is then entered into the equation mentioned above for weekly salaries — $230 divided by 40 hours would come to $5.75, bringing the overtime pay to $8.63/hr.  Yearly salaries would follow the second part of this formula — dividing your salary by 52 weeks, and then continuing on with the weekly salary formula.

 

Piece work

Piece work pay involves compensation at a fixed rate for each unit produced or action performed by an employee.  To figure out overtime for this pay system, you would add together the worker’s total pay for an entire 7 day work week, and then divide by the total amount of hours worked during the week.  Overtime pay would equal one-and-a-half times the amount of that final figure.

 

For example, if you made $500 during the work week, and worked 60 hours, you would divide 500 by 60 to arrive at the hourly rate of $8.33.  Your overtime would then come out to be around $12.50 for every hour worked over 40 hours.

 

Flat Rate

If you are paid a flat rate per day or job regardless of the hours you work, you would add all of your compensation for that week together, and then divide by the number of actual hours worked.  Suppose you are paid $80 a day, worked for 5 days out of the week, and worked 50 hours total during those 5 days.  Your total compensation of $400 would be divided by 50, for an hourly rate of $8.  Overtime would then amount to $12 per hour over 40 hours.

 

Who can receive overtime?

Overtime can be made by any employee who is not exempted from receiving overtime by the FLSA or Chapter 337.  That covers a broad scope of job titles and positions.  What is probably more important is who can’t receive overtime pay.  The FLSA and Chapter 337 contain a large number of exemptions for certain types of workers.  For brevity’s sake, we’ll recount just some of the employees who are not eligible under Kentucky law.

 

KRS 337.285 states that overtime pay is not required to be given to:

 

– retail employees

– restaurant and hotel employees

– employees providing 24-hour residential care to abused or neglected children

– employees providing in-home companionship through a third-party service for the sick/elderly

– seamen

– automobile, boat, or airplane salespersons

– external or traveling salespersons

– taxi drivers

– babysitters

– agricultural employees

– apprentices

 

The above exempt positions are just a selection of the workers who are not eligible for mandatory overtime pay.  In addition to these positions, executives, professionals, supervisors, administrative employees, and outside salespersons are excluded from Kentucky’s overtime pay laws because they are explicitly removed from Chapter 337’s definition of employee.  These excluded positions include persons employed as CEOs, attorneys, doctors, office supervisors, managers, etc.  There are specific tests provided by the Kentucky Labor Cabinet used to determine if a person comes under any of these exclusions, but these tests are far too extensive to include in this article.  We’ll discuss these exclusions in an upcoming post, though, for those of you interested in learning more about these particular excluded workers.

 

Have you been denied overtime pay?

Now that you know more about the way overtime pay works, you should be able to protect yourself against an employer unlawfully withholding your deserved compensation.  If you believe you have been unfairly denied overtime pay, the attorneys at Abney & McCarty are here to help you.  We can help you figure out what you are owed and how you can be made whole.  Contact us today to discuss your options.