Employees who are not exempt from overtime rules are entitled to a greater pay rate for any hours they work over forty in a week. Federal and New Jersey employment laws protect this right and impose penalties and legal liability on employers who fail to pay overtime rates to their employees. Under the federal Fair Labor Standards Act (FLSA), an employer may be liable to employees for double the amount of unpaid overtime. The statute allows an employee to bring a lawsuit on behalf of themselves and other employees in similar circumstances. A group of retail employees recently settled a lawsuit that alleged overtime violations under the FLSA and state law. As part of the settlement, the defendant agreed to pay $1.25 million in damages.
The FLSA requires employers to pay time-and-a-half to non-exempt employees for overtime work. Generally speaking, overtime hours begin once an employee has worked forty hours. The statute uses the term “workweek,” but does not provide a definition. Employers may vary on how they define the term, although a workweek must consist of seven days. A workweek typically goes from Monday to Sunday or Sunday to Saturday. If an employee works forty-five hours during the period that the employer considers a workweek, the employer must pay them the overtime rate for five hours.
Section 16(b) of the FLSA allows employees to bring collective actions for “other employees similarly situated.” A collective action under the FLSA is similar to a class action in many ways. It allows multiple employees with similar claims to pool their claims, which can make asserting their rights more efficient. One important difference is that FLSA collective actions are strictly “opt-in.” Some class actions automatically include all parties who meet the criteria for the class unless they opt out of class membership. For an FLSA collective action, potential plaintiffs must give written consent to be part of the lawsuit.
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