Utah Overtime Laws

January 24th 2024

Utah Labor Laws include provisions for overtime pay to ensure fair compensation for employees who work beyond standard hours. Under Utah overtime laws and the federal Fair Labor Standards Act (FLSA), non-exempt employees are entitled to receive one and a half times their regular rate of pay for each hour worked beyond 40 hours in a workweek. These laws aim to protect workers from excessive work hours without appropriate compensation and promote a balanced work-life dynamic.

This article will provide information to successfully navigate Utah’s overtime regulations, whether you’re an employer aiming for compliance or an employee defending your rights.


This article covers:


Utah Overtime Rates

In Utah, employees who work over 40 hours per week are entitled to overtime pay at time-and-a-half (1.5) for every additional hour worked.

Since the regular minimum wage in Utah is $7.25 per hour, this means the overtime minimum pay is $10.88 per hour. 

Overtime Entitlement in Utah

According to Utah overtime laws, overtime pay is required for any non-exempt employees. 

Employees in non-exempt industries who make less than $684 per week ($35,568 annually) are entitled to overtime compensation.

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 Utah.

Compensatory Time in Utah

Based on the Utah Admin. Code 477-8-5, employees in Utah who are non-exempt (eligible for overtime) must have a prior agreement to receive compensatory time off, “comp time”, instead of overtime pay. Comp time is also provided at the rate of time-and-a-half.

Non-exempt employees can accumulate up to 80 hours of comp time. With prior approval from the Division Director, comp time can go up to 240 hours for regular employees or 480 hours for correctional officers, emergency, or seasonal employees. Once an employee reaches the maximum limit, any additional overtime worked must be paid by their employer on the payday for that specific period.

When a non-exempt employee is transferred from one agency to another or has been promoted, reclassified, reassigned, or transferred to an exempt position, the employer is required to pay off the employee’s remaining comp time balance down to zero. This must be done using the pay rate of their previous position.

Overtime for Tipped Employees in Utah

In Utah, the overtime rate for tipped employees is 1.5 times their regular wage for every overtime hour worked. However, tipped employees are subject to a lower minimum wage of $2.13 per hour instead of the regular state minimum wage. 

The use of a “tip credit” system, which permits employers to pay tipped employees a reduced minimum wage, is permitted by both state and federal legislation. However, it is important to note that tipped workers must accumulate enough tips to total up to the regular minimum wage of $7.25. If their wage, including tips earned, falls below the regular minimum wage, their employer must make up the difference.

That being said, an employer cannot include that tip credit in the calculation of overtime pay. This means that the entire minimum wage (following the Utah minimum wage which is $7.25) must be taken into account when calculating overtime pay.

Overtime for Salaried Employees in Utah

Utah recognizes the entitlement of overtime pay for certain salaried employees. A salaried employee refers to an individual who receives a predetermined salary, regardless of the number of hours worked.

To determine a salaried employee’s overtime rate, an employer must first determine their employee’s hourly rate by dividing the salary by the number of hours that salary compensates for.

Then, take the hourly pay rate to calculate the overtime rate for salaried employees using the following formula:

Hourly pay rate x Overtime Hours x Overtime Rate (1.5)

It is important to note that 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.

Calculating Overtime with Commission in Utah

In Utah, employees who may receive commissions are still entitled to overtime pay although the rate may differ.

If an employee receives weekly commissions, the commission will be combined with the employee’s weekly wage to get the total earnings for the week. The amount is then divided by the total number of hours worked in the week to determine the regular hourly rate for that week. For any hours worked beyond 40 per week, the employee must be paid additional compensation at a rate of half of the regular hourly rate.

For example, let’s say an employee works 45 hours a week at a rate of $7.25/hour (Utah minimum wage) and receives $50 in commissions for that week. 

(Total hours x Hourly Rate) + Commission

= (45 x 7.25) + 50

= $376.25 (total earnings for the week)

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

= $4.18

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.

Overtime Exceptions and Exemptions in Utah

Utah keeps a list of occupations that are exempt from overtime laws following federal standards. This list includes:

  • Executives, administrators, and other professionals earning at least $684 per week
  • External salespeople 
  • Computer-related workers
  • Independent contractors
  • Transportation workers
  • Certain agricultural and farm workers
  • Live-in employees such as housekeepers

Statute of Limitations for Unpaid Overtime Claims in Utah

Utah follows guidelines set by the federal Fair Labor Standards Act (FLSA) when it comes to filing an overtime claim. According to the FLSA, individuals who wish to recover unpaid overtime wages must file a lawsuit within two years from the date of the employer’s wage violation. This means that if you file a lawsuit today, you can only seek recovery for the past two (sometimes three) years. 

Let’s say you believe that your employer has not paid you proper overtime wages since January 1, 2016. If you wait until June 1, 2019, to file your lawsuit, you will only be able to claim unpaid wages from June 1, 2017, to June 1, 2019. However, if an employer’s violation of the FLSA was willful, the statute of limitations may be extended to three years. A violation is considered willful if the employer knew that their actions were prohibited by the FLSA or if they showed reckless disregard.

Legal Cases Relating to Overtime Compensation in Utah

Below, we present law cases relating to fair overtime compensation for employees in Utah: 

1. Employee Still Seeks Overtime Back Wages Despite Prior Agreement to Release Claims

In the case of Saari v. Subzero Engineering, Robert A. Saari claimed that his former employer, Subzero Engineering (Subzero), did not reimburse him for certain expenses. Saari claimed that he was owed overtime compensation under the Fair Labor Standards Act (FLSA). Subzero filed a motion for partial summary judgment, arguing that Saari had released all claims against them by signing an Agreement.

Subzero’s argument revolved around an Agreement that was signed between Saari and Subzero, whereby Saari received a settlement payment of $5,027 in exchange for a signed release of claims. This meant that Saari would release Subzero from any claims arising out of his employment, including overtime compensation. The Agreement also stated that Saari acknowledged and agreed to the terms of the release and had a right to consult with an attorney. Saari also had 21 days to consider the agreement before signing it.

The court analyzed the factors relevant to determining the nature of the Agreement, including the clarity of the language used, Saari’s education and business experience, the time Saari had to deliberate on the release, whether he knew or should have known his rights, and so on. The court concluded that most of the factors weighed in favor of upholding the release part of the Agreement and that Saari had the chance to negotiate the terms but failed to do so. 

Saari argued that the Agreement did not release his FLSA claim because he did not negotiate overtime wages as part of it. However, the court found that the Agreement encompassed all of Saari’s claims, including overtime wages. The court also noted that Saari failed to provide evidence to support his arguments regarding the negotiations.

Based on these findings, the court concluded that the Agreement was binding and barred Saari’s claim for overtime wages as a matter of law.

Key lessons from this case:

  • If an agreement encompasses all claims arising out of employment, including overtime wages, it may be upheld and legally binding.
  • Employees need to provide evidence to support their arguments regarding the negotiations and terms of the agreement.
  • Agreements and releases signed by employees can have significant implications for overtime claims under the FLSA.
2. Video Rental Company to Pay Overtime Back Wages to Former Employee

In the case of Smith v. Batchelor, Stephen Smith filed a lawsuit against his former employers Dorothy Batchelor, Larry Peterman, and Janae Kingston, collectively known as the Movie Buffs video rental company. Smith alleged that Movie Buffs violated the federal Fair Labor Standards Act (FLSA) and the Utah Payment of Wages Act (UPWA) when they refused to provide overtime back wages before Smith left the company.

Smith was hired by Movie Buffs to perform computer services. Despite the lack of a formal written employment contract, Smith’s understanding was that he would be a salaried employee paid $2,000 per month. However, according to Smith’s statements, he was paid an hourly wage of $11.65. Having worked a total of 790 hours for Movie Buffs, Smith was only paid for 580 hours, which left 210 hours’ worth of unpaid wages, 188 of which were overtime hours. Smith claimed that the total amount owed was $3,544.

Initially, Smith requested only the back wages under the UPWA, but Movie Buffs refused to comply. Subsequently, Smith sued Movie Buffs for back wages, overtime compensation, and attorney fees. The court granted summary judgment on Smith’s UPWA claims and an additional $4,000 for the sixty days during which his wages continued to accrue. However, the court denied the attorney’s fees as the $4,000 penalty was deemed sufficient because Smith was representing himself in the lawsuit.

Key lessons from this case:

  • Properly documenting and defining employment terms is crucial. Having clear documentation regarding employment terms can help avoid disputes related to overtime and wages.
  • Additional penalties or damages can be liable when employers fail to pay overtime wages promptly.
  • While it is possible to self-represent, this case highlights the advantages of seeking legal representation, as the court may deny requests for attorney’s fees if an employee chooses to represent themselves. 
3. Former Multilevel Marketing Employee Sues Employer for Overtime Pay Violations

In the case of Murdock v. Skinner, Rosemary Murdock filed a lawsuit against Rosemary Skinner, and Health & Wealth Distributors (H&W). Murdock sought to recover unpaid overtime wages under the Fair Labor Standards Act (FLSA). 

Murdock was hired by H&W to perform clerical work and assist with their business. Skinner, however, was a high-level distributor at ASEA, LLC, a multilevel marketing company. Ten months after Murdock started working for H&W, she enrolled in ASEA as a distributor under Skinner. 

Skinner and H&W argued that Murdock was exempt from overtime pay under the FLSA as an administrative employee. They also argued that even if Murdock was classified as a regular employee, she would only be entitled to two years of damages as she failed to show that the misconduct was willful. That being said, Skinner and H&W filed for a summary judgment in their favor.

The court determined that Murdock failed to present enough evidence to show overtime pay violations. However, the court denied the argument of whether the administrative exemption applied to Murdock. In summary, the court granted the motion for summary judgment in favor of Skinner and H&W regarding the willfulness of violation but denied it regarding the administrative exemption.

The case still needed to address the issues of overall entitlement to overtime wages. The final ruling of this case is undetermined.

Key lessons from this case:

  • The administrative exemption requires that the employee’s primary duty be directly related to the management or general business operations of the employer or the employer’s customers.
  • Employees claiming willful violations of the FLSA must provide evidence that the employer either knew or showed reckless disregard for whether their conduct violated the statute.
  • If an employer wilfully violates the FLSA’s overtime pay regulations, they can be held liable for up to 3 years of back wages.

Learn more about Utah 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.