South Carolina does not have their own overtime laws so they abide by the federal Fair Labor Standards Act (FLSA) when it comes to regulating overtime laws. Such laws have been created to prevent employees from being exploited and to promote a healthy work-life balance by appropriately compensating employees for their extra working hours.
According to South Carolina Labor Laws, employers must compensate employees for their overtime at a rate of time-and-a-half for every hour worked over 40 in a week.
This article will provide information to successfully navigate South Carolina’s overtime regulations, whether you’re an employer aiming for compliance or an employee defending your rights.
This article covers:
- South Carolina Overtime Rates
- Overtime Entitlement in South Carolina
- Unauthorized Overtime in South Carolina
- Overtime for Tipped Employees in South Carolina
- Overtime for Salaried Employees in South Carolina
- Calculating Overtime with Commission in South Carolina
- Overtime Exceptions and Exemptions in South Carolina
- Statute of Limitations For Unpaid Overtime Claims in South Carolina
- Penalties for Not Providing Overtime Pay to Employees in South Carolina
- Legal Cases Relating to Overtime Compensation in South Carolina
South Carolina regulates overtime based on the federal Fair Labor Standards Act (FLSA). For any hours worked beyond a total of 40 in one work week, the majority of hourly employees in South Carolina have the right to an overtime pay rate.
Overtime in South Carolina is set at 1.5 times the regular hourly rate for workers who work over 40 hours a week.
Since the regular South Carolina minimum wage is $7.25 per hour, this makes South Carolina’s overtime minimum wage $10.88 per hour (1.5 times the minimum wage).
According to South Carolina overtime laws, overtime pay is required for any non-exempt employees.
An employee who earns below $684 a week ($35,568 per year) and works in a non-exempt industry is entitled to overtime pay.
However, an employee’s overall eligibility for overtime pay will be based on what the job duties are as well as what type of business they are in.
Read more about Overtime Exceptions and Exemptions in South Carolina.
In South Carolina, an employer is responsible for approving any overtime hours an employee works. In the event of unauthorized overtime, employees must still be compensated accordingly.
However, an employee who performs unauthorized overtime can be subjected to disciplinary actions such as termination of employment.
A tipped employee in South Carolina is entitled to overtime compensation. However, their minimum wage is lower than the standard state minimum wage.
In this case, the South Carolina minimum wage is $7.25 and the minimum tipped employee wage is $2.13.
If a tipped employee works overtime hours, their overtime rate will be calculated based on the full minimum wage, not the lower wage they are being paid.
In South Carolina, some salaried employees are entitled to overtime pay. A salaried employee is someone who receives a set amount of pay regardless of how many hours they work.
To determine a salaried employee’s overtime rate, an employer must divide their salary by the number of hours that salary compensates for to get their regular rate. Then, take the regular rate and multiply it by the overtime hours worked and the standard overtime rate of 1.5 per hour.
Overtime Rate for Salaried Employees = Normal rate x Overtime Hours x Overtime Rate (1.5)
Normal Rate = Salary / Hours Compensated
If an employee’s salary covers less than 40 (hours) in a workweek, their regular rate will be added for every subsequent hour working up to the 40. Only after 40 hours will time-and-a-half be counted.
If an employee’s salary covers 40 (hours) in a workweek, then time-and-a-half will be paid for any hours over 40.
Employees in South Carolina who receive commissions are eligible for overtime at a rate of 1.5 times their regular hourly rate. Their regular hourly rate must include the commissions earned as well. However, they will only be given half of that rate for every overtime hour.
For example, let’s say an employee works 45 hours a week at a rate of $7.25/hour (South Carolina minimum wage) and receives $50 in commissions for that week. We need first to calculate the new regular hourly rate:
(Total hours x Hourly Rate) + Commission
= (45 x 7.25) + 50
Then, divide that by the total hours worked in the week.
= 376.25 / 45
=$8.36 (new regular hourly rate)
To determine the overtime rate for the commissioned employees, we need to take that new regular hourly rate and halve it.
$8.36 / 2
Since the employee worked an extra 5 hours in the week, that makes his overtime compensation $20.90 ($4.18 x 5 hours).
The amount will vary according to the hours worked, hourly rate, and commission earned.
Some occupations are exempted from the overtime rules, for instance, jobs like:
- Executive, administrative, and professional employees
- Outside sales employees and employees in certain computer-related occupations
- Employees of certain seasonal amusement or recreational establishments
- Certain farm workers
- Casual babysitters and people employed as companions to the elderly or infirm
- Certain commissioned employees of retail establishments
- Taxi drivers and certain other employees in the transportation industry
- Announcers, news editors, and chief engineers of certain non-metropolitan broadcasting systems
- Domestic service workers living in the employer’s residence
- Employees of motion picture theaters
- Farm workers
South Carolina’s statute of limitations for filing an overtime claim adheres to the FLSA.
Employees who want to recover unpaid overtime wages need to file a lawsuit within two years from the date of the alleged overtime wage violation.
Employers who knowingly or repeatedly disregard overtime pay requirements in South Carolina may face severe penalties. This includes civil money penalties of up to $1,000 for each violation.
Willful violations of the Fair Labor Standards Act (FLSA) can lead to criminal prosecution, with potential fines of up to $10,000 imposed on the violator.
Below, we present law cases relating to fair overtime compensation for employees in South Carolina:
1. Salaried Employees Wrongfully Assume Overtime Pay Entitlement
In the case of Counts v. South Carolina Electric & Gas Co., 17 salaried employees of South Carolina Electric and Gas Company (SCE & G) filed a lawsuit for unpaid overtime wages. These 17 employees were stationed to work at a nuclear station and were doing routine maintenance. The employees were then reassigned and asked to perform outage-specific tasks, often resulting in overtime work hours.
The employees were administrative employees who were exempt from overtime under the Fair Labor Standards Act (FLSA). However, they claimed that they should receive overtime pay for being asked to perform other duties that were considered nonexempt from overtime pay.
The court examined the FLSA regulations and found that the exemption status applied to these 17 employees as they earned salaried above a specific threshold. The court concluded that employees were correctly classified as exempt administrative employees.
Ultimately, the court granted summary judgment in favor of SCE & G.
Key lessons from this case:
- The case shows how employers can sometimes assign salaried employees to other nonexempt tasks without affecting their exemption from overtime pay.
- Employees earning a salary above a specified threshold may be exempt from overtime pay eligibility, regardless of their tasks during specific periods.
- Despite being exempt from overtime pay, employees should always question their overtime rights when they feel like they are being exploited.
2. Retailer Agrees to Pay Back Wages to Employees for Violating FLSA
In 2019, the U.S. Department of Labor’s Wage and Hour Division (WHD) held an investigation into Planet Vapor Inc. (Vapor), a retailer, for violating the Fair Labor Standards Act (FLSA). The WHD found that some store managers were being paid a flat weekly wage that did not match the minimum wage of $7.25 in South Carolina. Vapor had also wrongly classified employees as exempt from overtime pay, even though they didn’t meet the criteria for exemption.
As a result, the employees were not compensated for any extra hours they had worked that exceeded 40 hours per week. Additionally, Vapor failed to include commissions in other employees’ regular pay rates when calculating overtime, which led to lower overtime pay than required by the FLSA. Lastly, Vapor had also failed to maintain their employees’ time and payroll records.
By the end of the lawsuit, Vapor had agreed to a settlement amount of $66,410 in back wages and liquidated damages. This amount was paid to 20 employees who were affected by Vapor’s violations.
Key lessons from this case:
- Pay calculations should consider all hours worked and any additional compensation components, such as commissions or bonuses.
- Employers should accurately classify employees as exempt or non-exempt from overtime requirements based on the criteria outlined in the FLSA.
- If employees have issues with overtime and misclassification at their work, they can contact the Department of Labor to investigate.
3. Employees Seek Overtime Back Wages After Being Misclassified as Independent Contractors
In the case of Weckesser v. Knight Enterprises SE, LLC., Patrick Weckesser filed a collective lawsuit against Knight Enterprises for violations of the Fair Labor Standards Act (FLSA) and the South Carolina Payment of Wages Act. Weckesser was a cable installation technician and claimed that he, and other similarly situated employees, were allegedly misclassified as independent contractors, thus depriving them of overtime pay.
Weckesser argued that they were all hired as independent contractors by Knight Enterprises and were not paid for their overtime hours worked. It was claimed that they were subject to policies and schedules set by Knight Enterprises. Weckesser also alleged that they were required to use equipment provided by Knight Enterprises, wore their company’s uniform and logo, and were restricted from working for other companies.
The issue was whether or not other similarly situated employees could be considered in the lawsuit. After considering various factors, the court determined that Weckesser and the other employees had provided evidence of the company’s overall policy that had violated the FLSA regulations. The court also determined that the employee’s job duties, supervision, and salary also played a strong part.
The court affirms that individual damages towards each employee needed to be assessed but decided that every one of those employees could be considered in this lawsuit. Ultimately, a settlement was reached that included an amount of $600,000, with $365,000 allocated to the employees and $235,000 allocated to attorneys’ fees and costs.
Key lessons from this case:
- Employees who were subject to policies and schedules set by the employer are considered employees rather than independent contractors.
- Similarly situated employees can join a collective lawsuit under the FLSA if they have evidence of the employer’s policy violation.
- Individual damages must be assessed for each employee involved in the lawsuit to determine their respective entitlement to overtime pay.
Learn more about South Carolina Labor Laws through our detailed guide.
Important Cautionary Note
When making this article we have tried to make it accurate but we do not give any guarantee that the information provided is correct or up-to-date. We therefore strongly advise you seek advice from qualified professionals before acting on any information provided in this article. We do not accept any liability for any damages or risks incurred for use of this article.