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I recently signed an offer letter for a "contract" job through a staffing agency to work for another company. It's a W2 position and the offer letter had verbiage similar to this: "You agree to be paid at a regular rate of $X per hour, and an overtime rate of $X per hour." Both the regular rate and the overtime rate are the exact same amount.

I'm not sure if these details matter:

  • $X per hour is substantially over $100k per year, if working a full year at 40 hours a week
  • The paragraph above this one stated this: "This is a non-exempt position."

Due to the nature of this work, I am expecting to work overtime somewhat infrequently. I could have mentioned this issue to the staffing agency, but I didn't want to bring up issues because I badly needed a position after 5 months of unemployment. So, if I work overtime, am I likely guaranteed 1.5x the normal rate, even though I signed the contract?

Michael Hall
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Adam
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2 Answers2

19

Overtime payments are mandated by federal law in the US and cannot be waived

Overtime Pay May Not Be Waived: The overtime requirement may not be waived by agreement between the employer and employees. An agreement that only 8 hours a day or only 40 hours a week will be counted as working time also fails the test of FLSA compliance.

https://www.dol.gov/agencies/whd/fact-sheets/23-flsa-overtime-pay#:~:text=Overtime%20Pay%20May%20Not%20Be,the%20test%20of%20FLSA%20compliance.

The overtime rate must by at least 1.5 times the regular hourly rate. The only exception are exempt employees, meaning employees exempt from federal wage and labor law, generally managers and the equivalent. Your example shows that job as specifically non-exempt.

Tiger Guy
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More of a comment on/extension of @tiger-guy's answer, because I don't have sufficient reputation to comment yet:

State governments in the United States (my personal knowledge is of New York State) may issue administrative orders on a per-industry basis that clarify what roles can be considered managerial and therefore exempt, and what (informed by practices in that industry) functions and tasks are permissible for managers vs non-managers.

These orders are designed to guard against employers simply classifying employees as managerial solely to get around FLSA

In a real world example: I worked at a restaurant where every single kitchen employee (13 total), only excluding the dishwashers, was designated a manager and not paid overtime. However, NYS rules define that managers in a kitchen have to be performing primarily oversight tasks –– such as coordinating tickets at the pass and finishing dishes –– and not working a station or prepping for service all day. Nor can someone be a manager but have no one reporting to them.

qaccount345
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