Chicago Overtime Pay and Minimum Wage Lawyers
The Fair Labor Standards Act (FLSA) is a federal law that requires all covered, nonexempt employees be paid at least the minimum wage for all hours worked. The FLSA also provides that covered, nonexempt employees who work more than 40 hours in the workweek must receive overtime pay at the rate of at least one and one-half times the employee’s regular rate of pay for the overtime hours (hours worked over 40 in a workweek). A work week, which can begin on any day of the week, is 7 consecutive 24-hour periods or 168 consecutive hours.
Most workers in the United States are covered under the FLSA. Employers, however, utilize many different schemes to avoid paying overtime and minimum wages to reduce payroll costs.
Minimum Wage Law
The federal minimum wage is $7.25 per hour. In states or cities where the minimum wage is higher than the federal minimum wage, employers are required to pay employees the higher of the city, state or federal minimum wage.
Illinois Minimum Wage Law
Effective January 1, 2020 the Illinois Minimum Wage is $9.25 per hour. The Illinois minimum wage will increase as follows:
|Year||Minimum Wage||Tipped Wage||Youth Wage|
Chicago Minimum Wage Law
As of July 1, 2020 the minimum wage in Chicago is $13.50 per hour for employers with 4 to 20 workers, and $14 per hour for employers with 21 or more workers. Tipped workers (workers who receive tips as part of their wage, like restaurant servers) have a minimum wage of $8.10 for employers with 4 to 20 workers, and $8.40 for employers with 21 or more workers. If a tipped worker’s wages plus tips do not equal at least the full minimum wage, the employer must make up the difference. The minimum wage for City of Chicago contracts or concessionaire agreements is $14.15 per hour, or $7.65 per hour for tipped workers.
Common ways that employers violate the overtime pay provisions of state and federal law include:
- Claiming that because an employee is paid a salary, he or she is not entitled to overtime pay;
- Failing to count all work time in computing overtime pay, such as not including travel time between jobs or time spent performing pre-shift or post-shift duties; or by requiring employees to work “off the clock;”
- Utilizing time clocks that “round down” time in 15-minute increments or that are otherwise solely favorable to the employer;
- Giving employees important sounding titles such as “assistant manager” in order to claim that they are exempt from the overtime laws;
- Paying employees cash at their straight-time hourly rate for all hours worked over 40 in individual work-weeks;
- Using illegal averaging techniques to avoid paying correct overtime wages, such as paying employees overtime on the basis of 80 hours every two weeks as opposed to 40 hours in an individual work-week;
- Excluding certain payments from the regular rate for overtime purposes, such as bonus and commission payments, thereby resulting in the employer paying the employee overtime wages based on an incorrectly low regular rate of pay.
All employees are entitled to overtime pay unless the employer can prove they fit into one of the few exemptions to the state or federal overtime laws.
Special overtime rules may apply to your employment if you are a law enforcement officer, fire protection worker, or other first responder, or are an employee of the federal government. Learn more here.
Special overtime (and minimum wage) rules also apply if you are a tipped employee.
Exemptions from Overtime Pay Law
Understanding the Exemptions and Exclusions from Overtime Pay Law
There are several exemptions — or exceptions — from the federal law that requires the payment of overtime pay. Whether any of the exemptions from overtime pay law apply to your employment depends on how you are paid and the specific job duties that you perform in your job. Job title alone never determines your right to overtime pay. And, many states provide greater rights to overtime pay, and fewer exemptions from state overtime pay laws.
Several categories of employment carry specific regulations regarding overtime exemptions, including:
- White collar employee exemptions
- Highly compensated employee exemption
- Computer employee exemption
- Outside sales employee exemption
- Commissioned retail sales exemption
- Motor carrier exemption
- Employees in hospitals and special care
- Blue collar workers
- Police, fire fighters, paramedics and other first responders
- Independent contractor exemption
An extensive list of the exempt status of specific jobs is also located on this website. If you have questions about whether you are entitled to overtime pay, contact our office via phone, email, or schedule an in-person consultation.
What Work Time Must Be Paid?
What is Work Time?
Generally, an employer must pay an employee for all time considered to be “work” and all “work” time counts towards hours worked towards overtime. What time is “work time” that must be paid by the employer is often complicated.
The FLSA defines the term “employ” to include the words “suffer or permit to work.” Suffer or permit to work means that if an employer requires or allows employees to work, the time spent is generally hours worked. If the hours are considered to be work, then they must be paid by the employer to the employee. Thus, time spent doing work not requested by the employer, but still allowed, is generally hours worked, since the employer knows or has reason to believe that the employees are continuing to work and the employer is benefiting from the work being done. This time is often referred to as “working off the clock.”
There are many situations that might lead to an employee not getting paid for work time, including:
- Delivery drivers load a truck, drive to the job site, and then unload the truck. Sometimes, an employer does not begin to pay for the work time until the truck arrives at its destination, so the worker is not paid for the time it took to actually load the truck or to travel to the job site. This is illegal.
- In an office setting or call-center, many time clocks are on computer workstations. If an employee has to turn on the computer and wait for the software to load before clocking in, he or she is not being paid for work time. This often happens in call centers and may be illegal.
Unpaid work time is a serious problem. Examples of situations where unpaid work time includes time that may or may not be considered hours worked under the FLSA include:
How to Correctly Calculate Overtime Pay
An employee’s overtime pay is based on his or her “regular rate of pay.” Under the FLSA, employees must be paid one and one-half times their “regular rate” of pay for all hours worked in excess of 40 during an individual work week. The regular rate of pay, however, is not always the same as the employee’s hourly rate of pay. This is because all work-related payments must be taken into account when calculating an employee’s correct regular rate of pay. As a result, an employee’s “regular rate” is always equal to or greater than his or her hourly rate of pay. There are various types of payments that employers are required to include when computing the regular rate of pay for all employees, both hourly and salaried.
The following types of payments must be factored in when calculating an employee’s regular rate of pay for overtime purposes.
- Commissions and Bonuses: When an employee receives commissions or a bonus, those payments must be included as part of his or her total compensation in calculating employee’s regular rate of pay for overtime pay purposes. Commissions and non-discretionary bonuses, or other additional payments that are directly tied to hours worked or to the achievement of specific results, must be taken into account when determining the regular rate of pay. Only “non-discretionary” bonuses, like certain types of gifts, may be exempt under FLSA overtime laws.
- Incentive Pay: Many employees will receive extra compensation for special achievements, such as if they are involved in the training or educating of another employee. Such incentive payments also must be included as part of the employee’s regular rate of pay.
- Shift Differentials: Employees who work nights, weekends, or holidays are often paid a “shift differential.” Shift differentials are often improperly excluded from the regular rate of pay in the healthcare industry. The FLSA requires employers to include in the regular rate of pay such types of payments, provided that the “differential” is less than 50% of the employee’s regular rate of pay.
- Longevity Pay: Extra payments related to the length of time an employee has worked at a company must be added to the employee’s total wages to determine the correct regular rate of pay.
There are certain types of payments that an employer may exclude under the FLSA when computing an employee’s regular rate of pay. For example, gifts, discretionary bonuses, profit-sharing plans, thrift-saving plans, and pension benefit plans may be excluded from computing an employee’s regular rate of pay. Also, employers may exclude all “premium” payments if the payment equals or exceeds one-and-one half times the employee’s pay rate for the hours worked during that time period.
Special rules apply to calculating overtime pay owed to salaried employees and tipped employees. Follow the links below to learn more:
Frequently Asked Overtime Pay Law Questions and Answers
Overtime hours means the time an employee works more than 40 hours per work week. Overtime pay is the special premium rate of compensation that employers must pay their employees for working overtime hours. Under federal law, overtime pay must equal at least one and one-half times an employee’s regular rate of pay. So, if an employee regularly makes $8/hour, that employee is entitled to make $12/hour for all the overtime hours he or she works.
Unpaid wages can mean (1) a portion of your pay that has been wrongly withheld, (2) pay or wages (including, commissions, bonus and vacation pay) that are owed to you, or (3) a paycheck that your employer never paid you.
All employees are entitled to overtime pay unless they fall into a specific exemption that excludes them from receiving overtime pay. The three largest exemptions include employees in “executive,” “administrative,” and “professional” job positions. Whether you are an exempt employee depends on your specific job duties and responsibilities. If you have questions about your exempt status, you should talk to a lawyer.
You are still entitled to be paid an overtime wage rate for all the overtime hours you work. Agreements that limit your right to overtime pay are unenforceable.
You do not need written records or proof of the number of hours you worked. It is the employer’s duty to maintain certain records regarding your work hours and pay. If your employer does not have those records, your testimony under oath will be sufficient to prove your claim.
No. Overtime pay must only be paid when you work more than 40 hours in a week and not more than eight hours in any one day.
You are potentially entitled to the overtime wages your employer should have paid you, interest and attorney’s fee. You are also potentially entitled to an additional amount of “liquidated damages.” Liquidated damages allow you to double the amount of unpaid overtime wages your employer owes you. For example, let’s say your unpaid overtime wages equal $15,000. If you get liquidated damages, you are entitled to $30,000 ($15,000 x 2).
You are entitled to receive liquidated damages in most instances. You will not be entitled to receive liquidated damages if your employer can prove that it acted in good faith.
The FLSA contains a two-year limitation period. That means you can recover overtime for the two (2) years prior to the date you file your lawsuit. This limitations period can be extended to three (3) years if your employer’s action of not paying you overtime was “willful.”
It depends. Every case is different; however, most lawsuits seeking overtime are settled quickly. That means it can take as little as a few months. However, if the employer vigorously defends the lawsuit, it could take between a few months to a year.
Yes. If you provide us with all the pertinent information, we can quickly calculate the potential damages that you are owed.
You may still be entitled to overtime pay because your employer may be wrongly telling you that you are an independent contractor. Whether or not you are an independent contractor depends on a variety of factors that we will need to discuss with you before we can give you an answer.
Yes. The FLSA applies to federal and state government employees.
No. This is a common method employers use to avoid paying overtime. The averaging of workweeks is expressly prohibited by law. You are entitled to receive overtime pay for each individual week you work more than 40 hours. In the above example, you are entitled to receive overtime pay for the 10 hours you worked more than 40 hours in week two.
Unless you work for the state or federal government, an employer providing compensatory or “comp time” instead of overtime pay is illegal.
Not necessarily. You are exempt based on your job duties and responsibilities and not based on what your employer calls you. It makes no difference if your employer calls you exempt or gives you a job title such as “manager” or “supervisor.” It is a common practice for employers to give workers the title of “assistant manager” to avoid paying overtime when those employees are not exempt and should be paid overtime.
Some job categories are exempt from the overtime requirements. However, these exemptions are narrowly construed against the employer claiming them, and the ultimate burden of proving that the exemption applies rests with the employer. Some jobs falling under the exemption provisions include commissioned sales employees of retail or service establishments, certain computer professionals, employees of motor carriers, such as trucking companies if the employee’s duties include driving or loading vehicles that weigh more than 10,000 pounds, employees of certain seasonal and recreational establishments, farm workers employed on small farms, salesmen, and mechanics employed by automobile dealerships, outside salespersons, executive, administrative, professional or outside sales employees who are paid on a salary basis.
Yes. This is one of the common misconceptions about overtime pay. You are not exempt just because you are paid a weekly salary. If you are not otherwise exempt under the FLSA, your employer must convert your weekly salary to an hourly rate and pay you time and a half for all hours worked in excess of 40 hours. This applies to monthly and semimonthly salaries as well.
To calculate your owed overtime, you must convert your “job rate” to an hourly rate. For example, let’s say you are a cable installer and you get paid $26.00 for each installation that you complete. You work 10 hours per day, five days per week and typically perform 20 installations in your regular work week. In a typical workweek, you make $400.00 ($26.00 x 20 installations) and work 50 hours per week. Therefore, you earn $8.00/hr ($400.00/50). Since your regular rate of pay is $8.00 an hour, your overtime rate is $12.00 (8.00 x 1.5).
The longer you wait, the less overtime pay you may be able to recover. It is also best to promptly pursue your claim so that time records and witnesses are readily available.
No. It is illegal for an employer to fire or in any way retaliate against an employee because he or she has filed a claim for overtime against the employer. We will help protect you if your employer tries to retaliate against you for filing an overtime claim.
You should seek legal advice. The overtime laws are highly technical and we can help apply the law to your special situation. We provide free consultations and will tell you if you are owed earned wages and if we can help you.
In most cases, all costs for overtime and unpaid wage cases will be advanced by our firm. Because our fee is typically contingent on a recovery from the employer, the firm does not get paid or reimbursed for expenses until the recovery is made.
No. We will only receive a fee if we are successful in resolving your claim.