Many states have their own state overtime laws, including statutes, regulations and common law, which may be more protective and generous to employees in the substantive rights they create. Many states have passed their own laws to govern overtime that are more protective and generous than the substantive rights created under federal overtime law. The federal Fair Labor Standards Act (FLSA) explicitly permits states to set and enforce more protective wage-and-hours laws than required under the FLSA.
There are also many states that have not enacted substantive laws governing overtime pay, including Arizona, Arkansas, Florida, Georgia, Louisiana, Mississippi, Nebraska, Oklahoma, and Texas. In these states, the federal FLSA regulates overtime for employees. You can find more about the FLSA and federal overtime law here. Some of the states with that have more protective overtime laws than under the FLSA include California, Colorado, Illinois, Kansas, Kentucky, Massachusetts, Maine, New Mexico, New York, and Pennsylvania.
In all states without substantive overtime law, employers must pay overtime to employees on at least a workweek basis pursuant to federal law. This is because the federal FLSA requires all employees to be paid 1.5 times their regular rate for all hours worked over 40 each workweek.
In some states with substantive overtime law, employees are entitled to payment based on a workweek and workday basis. For example, under Colorado overtime law, an employee must be paid overtime for work in excess of 40 hours per workweek; 12 hours per workday; or 12 consecutive hours without regard to the starting and ending time of the workday. The Colorado law requires employers to pay employee under the calculation that results in the greater payment of wages. Under California overtime law, employees are entitled to overtime pay at 1.5 times the regular rate for hours 8-12 in a workday. The law further requires overtime pay at 2 times the regular rate for all hours worked over 12 in a workday.
Under 29 C.F.R. § 778.114, the FLSA allows damages to be calculated for misclassified salaried employees at .5 times their regular rate for all overtime hours worked. This is known as the “fluctuating workweek method” of calculating overtime. Under this fluctuating workweek method:
Assuming an employee earned $1,000 and worked 50 hours without overtime pay, he would be owed $100 in unpaid overtime under the fluctuating workweek method of calculation: $1,000/50 hours=$20/hour (regular rate); $20/2=$10 per hour (overtime rate); $10 x 10 hours = $100.
However, some courts have determined calculating overtime based on a fluctuating workweek is inconsistent with substantive state overtime law because results in an employee earning a diminishing hourly wage as the he increases his overtime hours. States that have found the fluctuating workweek method inconsistent with state wage law include Alaska, California and New Mexico.
Assuming an employee earned $1,000 and worked 50 hours of overtime pay, he would be owed $375 unpaid overtime under the non-fluctuating workweek method utilized in New Mexico. Here is the calculation: $1,000/40 hours= $25/hr (regular rate); $25 x 1.5 = $37.50 per hour (overtime rate); $37.50 x 10 hours = $375.
In states without substantive overtime laws, employees must be classified pursuant to the FLSA. States that follow the FLSA exemptions by default include Arizona, Arkansas, Florida, Georgia, Louisiana, Mississippi, Nebraska, Oklahoma, and Texas. However, many states have more protective overtime laws that decline to adopt FLSA regulations. For example, the New Mexico Minimum Wage Act declined to adopt the FLSA’s federal Motor Carrier Act (FMCA) This has resulted in some workers recovering overtime under state law that they would otherwise been unable to recover under federal law.
Courts have consistently held that more protective overtime state laws like those in New Mexico are not preempted by federal law. This is because the FLSA contains a savings clause that permits states to set more stringent wage-and-hour laws than the FLSA. 29 USC § 218. As the Court explained in McLeland v. 1845 Oil Field Servs., 97 F. Supp. 3d 855, 864 (W.D. Tex. 2015): “The FLSA does not forbid the payment of FMCA covered employees time-and-a-half for overtime. The NMMWA may require time-and-a-half overtime payments for employees who fall under the FMCA exemption. The two are not in fatal conflict because companies could comply with both federal and state law by paying FMCA exempt employees time-and-a-half.”
In states without substantive overtime laws, the statute of limitations on overtime claims is governed by federal overtime law. The FLSA provides for a 2-year statute of limitations from “after the cause of action accrued” to file an overtime claim. The statute of limitations is extended to three years if the plaintiff pleads a general averment of willfulness in his complaint. Accordingly, the statute of limitations for federal claims is limited to a maximum of 3 years.
However, some state overtime laws have longer statutes of limitations (SOL) than the FLSA. For example, California has a 4-year SOL, Kentucky has a 5-year SOL, Maine has a 6-year SOL; and New York has a 3-year SOL. In New Mexico, the statute of limitations may be extended indefinitely to “encompass all violations that occurred as part of a continuing course of conduct regardless of the date on which they occurred.”
In states without substantive overtime laws, the procedural requirements for the litigations of multiple plaintiffs are governed by Section 16(b) of the FLSA. The opt-in provision (1) allows individuals to bring actions on behalf of themselves and those similarly situated; and (2) requires individuals to affirmatively “opt-in” to the case by filing a consent form with the Court.
In states with substantive overtime laws, the procedural requirement for the litigation of multiple plaintiffs is governed by Section 16(b) of the FLSA and Rule 23 of the Federal Rules of Civil Procedure. Rule 23 actions are opt-out class actions, whereas FLSA collective actions are opt-in. Accordingly, opt-out state class actions typically have a higher participation rate among potential class members than opt-in FLSA actions.
In states without substantive overtime law, Section 16 of the FLSA mandates that a prevailing plaintiff is presumptively entitled to double the amount of their unpaid overtime. The FLSA allows an employer to avoid paying these liquidated damages if he can show that the failure to pay was in good faith and he had reasonable grounds to believe his actions did not violate the FLSA. In these states, employees at best, will receive double the amount of their unpaid overtime.
Some states with substantive overtime laws have increased penalties for overtime wage violations. For example, Massachusetts overtime law and New Mexico overtime law impose mandatory triple damages on all overtime claims. Similarly, Illinois overtime law allows for treble damages plus 5% of the amount of any underpayment for each month following the date of payment that overtime remains unpaid.
Our unpaid overtime attorneys based in Dallas, Texas have national unpaid overtime litigation experience in federal courts throughout the United States. Mr. Siegel has personally represented clients in wage and hour suits in at least 20 states, including Alaska, Arizona, California, Colorado, Illinois, Louisiana, Massachusetts, Michigan, Missouri, New Jersey, New Mexico, New York, North Carolina, North Dakota, Ohio, Pennsylvania, Tennessee, Texas, and Virginia.