Compliance Watch:

What are my rights as an hourly employee in the US?

An hourly employee is someone who receives payment based on the number of hours they work within a week. In contrast to salaried employees who receive a fixed wage regardless of their weekly working hours, hourly wage employees are compensated according to the time they put in.

Hourly wage workers typically have distinct employment agreements with their employers, utilizing systems such as time cards or timesheets to record their work hours. The determination of how many hours these employees work each week rests with their employers.

Compensation for hourly wage workers is contingent upon the actual hours they work. In contrast to salaried workers whose pay is predetermined, employees on hourly wages have their earnings tied to their work schedule. Consequently, their income can fluctuate from one week to another.

As an hourly wage employee, you are entitled to receive at least the federal and state minimum wage requirements and while there are no strict limits on the maximum number of hours an adult can work within a week, specific regulations govern hourly pay that exceeds certain weekly hours.

Here’s a comparison table highlighting the key differences between hourly and salaried employees in the US:

Please note that the categorization of employees as exempt or non-exempt can influence some of these differences. The Fair Labor Standards Act (FLSA) and state laws govern these distinctions.

Although there isn’t a set limit on the maximum hours that adults can work weekly, there are particular regulations governing hourly wages once an individual surpasses 40 hours of work. This commonly equates to eight-hour days spread across five workdays, but variations exist, such as 12 or 10-hour shifts. These variations hinge on factors like individual availability, employer stipulations, and industry norms.

For instance, healthcare workers might engage in extended shifts due to the critical demands of patient care. Any hours exceeding 40 within a week are classified as overtime and merit compensation at a rate of one and a half times the regular pay for each hour beyond the 40-hour threshold.

The established federal minimum wage stands at $7.25 per hour, specifically intended for eligible nonexempt employees.

For those employees who receive tips, a separate minimum wage of $2.13 per hour is in place. The total sum of tips and the base wage of $2.13 should collectively amount to at least $7.25 per hour. If this threshold isn’t met, your employer is obligated to compensate to bridge the gap.

Several states and municipalities have their own prescribed minimum wage rates. In cases where the federal and local minimum wages differ, the higher rate prevails. It’s recommended to verify the minimum wage in your respective state.

Furthermore, your state might also establish distinct minimum wage regulations for employees who receive tips. You should investigate whether your state enforces a higher minimum wage for employees who earn tips.

Download U.S. Minimum Wage 2024 Poster now.

The Fair Labor Standards Act (FLSA) encompasses the federal regulations for overtime compensation. Unless considered exempt, employees covered by this Act are required to receive overtime pay for any hours exceeding 40 within a workweek, at a rate of no less than one and a half times their usual pay rate. The Act doesn’t impose a limit on the number of hours individuals aged 16 and above can work during a workweek. Overtime pay is not mandated by the FLSA for work conducted on Saturdays, Sundays, holidays, or regular days of rest, except when overtime hours are logged on such days.

The Act is applicable based on a workweek structure. An employee’s workweek is a consistent cycle of 168 hours, spanning seven consecutive 24-hour periods. It’s not essential for this cycle to coincide with the calendar week; it can start on any day and at any time of day. Various employees or employee groups can establish distinct workweeks. The practice of averaging hours across multiple weeks is not permissible. In general, overtime wages accrued in a given workweek must be disbursed on the regular payday for the pay period in which they were earned.

Taking meal and rest breaks is an important consideration for hourly employees in the US. While federal law does not require employers to provide specific meal or coffee breaks, there are regulations in place that determine compensation for breaks taken. When employers do offer short breaks, usually ranging from 5 to 20 minutes, these breaks are considered compensable work hours and are included in the total hours worked during the week. Unauthorized extensions of authorized work breaks do not need to be counted as hours worked if the employer clearly communicates the time limit for breaks.

Meal periods, which typically last at least 30 minutes, serve a different purpose than short breaks and are not considered work time. As such, they are not compensable. It’s important for hourly employees to understand their rights and their employer’s policies regarding meal and rest breaks.

Further, while federal law does not mandate these breaks, some states have specific laws outlining break requirements for employees. Therefore, it’s essential for hourly workers to be aware of both federal and state regulations to ensure they are receiving the appropriate breaks and compensation.

Many companiesin the US extend leave benefits to their employees, allowing them to take time off from work for a variety of reasons. These leave benefits, whether fully paid, partially paid, or unpaid, are generally established through an agreement between the employer and the employee, sometimes facilitated by an employee representative like a union.

One key legal framework governing leave benefits is the Family and Medical Leave Act (FMLA). This legislation grants specific employees the option to take up to 12 weeks of unpaid leave annually while ensuring their job remains protected, and their group health benefits are sustained during the leave period.

The Fair Labor Standards Act (FLSA) also comes into play when discussing leave benefits, though it’s essential to note that it covers only certain forms of leave. While some types of leave are mandated by law, others are voluntary incentives provided by employers. There’s a common misconception that the FLSA comprehensively oversees leave benefits, but this isn’t the case. The FLSA doesn’t regulate various employment practices, including vacation, holiday, or sick pay, meal or rest periods, premium pay for weekend or holiday work, pay raises, and discharge-related matters. It’s crucial to recognize these distinctions to fully understand the scope of leave benefits within the legal landscape.

Deductions from an employee’s pay involve subtracting specific amounts directly from their paycheck. In comparison to state laws, federal regulations concerning these deductions impose fewer limitations. 

Deductions can be categorized into distinct types:

• Mandatory deductions stipulated by legal regulations. Instances of these include wage garnishments, which comprise taxes like Social Security and income taxes that are also mandated deductions.
• Deductions enacted for the convenience of the employer. Illustrations of such deductions are those undertaken to offset overpayments, wage advances, or deductions due to occurrences like spillage, breakage, or cash register discrepancies.
• Deductions carried out as a gesture for employees. Examples encompass premiums for benefits, charitable contributions, and expenses for uniforms.
• Voluntary deductions authorized by the employee in writing, like charitable donations.

The laws enforced by the U.S. Equal Employment Opportunity Commission (EEOC) grant fundamental rights to job applicants and employees working in the United States. These rights are applicable to individuals regardless of their citizenship or work authorization status, covering full-time, part-time, seasonal, and temporary employees as long as they work for a covered employer. Most employers with at least 15 employees, including federal government agencies, are subject to these laws, along with many unions and employment agencies. These rights encompass:

• Freedom from Discrimination: You are entitled to a work environment free from discrimination based on race, color, religion, sex (including pregnancy, gender identity, and sexual orientation), national origin, disability, or genetic information. Age discrimination against workers aged 40 or older is also prohibited. This encompasses all job-related decisions like hiring, promotions, wages, benefits, and training.
• Freedom from Harassment: You have the right to work in a harassment-free environment, where no one targets you due to your race, color, religion, sex (including pregnancy, gender identity, and sexual orientation), national origin, disability, or age (if 40 or older), or genetic information.
• Reporting Discrimination Without Retaliation: You possess the right to report any potentially unlawful job discrimination without fearing punishment, different treatment, or harassment. This protection against retaliation ensures you can speak out or help others report discrimination without consequences.
• Requesting Accommodations for Religion, Disability, or Medical Conditions: You can request reasonable changes to your workplace if you need accommodation for your religious beliefs, medical conditions, or pregnancy, childbirth, or related medical situations. Although not all requests need to be granted, your employer should carefully consider each one and assess its feasibility.
• Protect Your Medical Privacy: EEOC laws tightly restrict employer inquiries about your health. You also possess the right to maintain the confidentiality of genetic and medical details you provide to your employer. Ordinarily, your employer should refrain from sharing your genetic or medical information with others, with only rare exceptions allowed under EEOC regulations.

Employees might possess extra workplace entitlements based on various federal, state, or local regulations, or their company’s internal guidelines. For instance, separate federal statutes mandate their employer to ensure them a minimum hourly wage and a secure work environment. State and local regulations could grant them more extensive safeguards than those enforced by EEOC, particularly if the employee works for a smaller business or if the perceived bias is due to reasons not encompassed by federal law, such as age (if under 40).

The Fair Labor Standards Act (FLSA) establishes standards for minimum wage, overtime pay, recordkeeping, and employment conditions for workers in the private sector as well as federal, state, and local governments. 

• Minimum Wage: The federal minimum wage is $7.25 per hour as of July 24, 2009. Some states also have their own minimum wage laws, and if both state and federal laws apply, the employee is entitled to the higher rate.
• Overtime: Covered nonexempt employees are eligible for overtime pay when they work over 40 hours per workweek, defined as a recurring 168-hour period (seven consecutive 24-hour periods). This overtime pay should be at least one and a half times the regular rate of pay. There is no set limit on the number of hours that employees aged 16 and older can work in a workweek. The FLSA does not mandate overtime pay for weekends, holidays, or regular rest days unless overtime hours are worked on those days.
• Hours Worked: “Hours worked” generally encompasses all the time during which an employee is required to be at the workplace, on duty, or at a designated work location.
• Recordkeeping: Employers must exhibit an official FLSA poster outlining its requirements. Additionally, they are required to maintain accurate records of employee time and pay.
• Child Labor: The FLSA includes provisions that safeguard the educational opportunities and well-being of minors, prohibiting their employment in conditions that could be detrimental to their health or education.

In most cases, employers have the right to terminate employees “at will,” meaning they can do so at any time and for any reason. They are not obligated by law to provide a reason for the termination. However, there are exceptions to this “at will” principle. It is against the law for your employer to terminate your employment:

• Based on factors such as race, sex, color, national origin, religion, gender, sexual orientation, gender identity (like transgender status), age, disability (including pregnancy), medical condition, language (or accent), or marital status
• in violation of a contract (such as a union agreement). An “implied contract” might exist if you have a reasonable expectation of ongoing employment (often due to long tenure, assurances of job security, consistent promotions, and positive performance evaluations)
• As a response to you asserting your legal rights (such as filing a claim for unpaid wages)
• Because you reported your employer to a government agency or the police

“At-will” employment does not cover all individuals. It excludes employees who are:

• Subject to a documented contract
• Operating within the framework of a labor union’s collective bargaining agreement
• Engaged in public sector employment

Severance pay is commonly provided to employees when their employment ends, typically determined by their tenure with the company. 

The Fair Labor Standards Act (FLSA) does not mandate severance pay, as its provision depends on an agreement between an employer and an employee (or their representative). 

If an employee doesn’t receive severance benefits from their employer’s plan, the Employee Benefits Security Administration (EBSA) might offer assistance. 

If provided under a severance agreement, hourly employees are generally categorized as either full-time or part-time based on their weekly work hours. Full-time status typically applies to those working around 40-45 hours or more each week, while part-time status is designated for those working fewer hours.

Full-time employees usually receive severance agreements as a standard practice, whereas part-time workers have a different scenario. The availability of severance agreements for part-timers is primarily determined by the company’s discretion and their assessment of potential legal implications.

In essence, the provision of severance agreements is largely guided by the company’s intentions and objectives.