Do you work more than 40 hours in a workweek? You might be eligible for overtime pay. There are several restrictions that could make you exempt, though. Consider the following questions below to help you determine your eligibility.
IS YOUR EMPLOYER EXEMPT?
Some employers aren’t covered under federal overtime rules. These include organizations with less than $500,000 in annual gross sales and that don’t conduct what the government considers interstate commerce. Some seasonal amusement or recreational establishments, small newspapers, fishing operations, and other very niche employers can be exempt. Very few other businesses are. Simply being situated along a U.S. interstate highway or ordering materials from vendors in another state can, according to the Texas Workforce Commission, put an organization into the category of conducting interstate business.
ARE YOU A FREELANCER OR INDEPENDENT CONTRACTOR?
True freelancers and independent contractors cannot earn overtime pay. However, just being called an independent contractor does not mean you are. Always be sure that your contractor relationships pass the IRS Independent Contractor Test. If you’re required to work onsite, use company equipment (including company-owned computers or vehicles), get reimbursed for all your expenses, receive benefits, or devote all your work time with that one business, then you may need to be reclassified as an employee instead.
ARE YOU AN EXEMPT EMPLOYEE?
Dozens of job types are exempt from receiving overtime pay. These include most executive, administrative, professional, outside sales, and computer employees who pass specific job duties tests as long as the employee is compensated on a salary or fee basis at a rate not less than what is considered the minimum standard rate ($455 per week as of July 2019). Other highly compensated employees are also exempt. For an overview of exemption rules, visit this page.
DO YOU RECEIVE BONUSES OR OTHER VALUABLE PERKS?
Currently, the area of fringe benefits and how they may or may not be considered part of an employee’s salary is confusing. Proposed regulation changes may exclude certain perks from employee’s regular rate of pay (which may otherwise force them into the highly compensated category). Until then, the follow reimbursements and benefits might interfere with your salary threshold:
- The value of any wellness programs, onsite specialist treatment, gym access and fitness classes, and employee discounts on retail goods and services you may receive.
- Payments for unused paid leave, including paid sick leave.
- Certain reimbursed expenses and travel expenses.
- Discretionary bonuses.
- Benefit plans including accident, unemployment, and legal services.
- Tuition programs such as reimbursement programs or repayment of educational debt.
If you answered “no” to each the question above, you may qualify for overtime. Ask your manager, HR department, or staffing firm for further guidance. The Texas Workforce Commission is also available to answer any questions you may have.