Longer hours lead to lawsuits over pay

A jury found against the Farmers Insurance Group in a $90 million verdict in 2001 for failing to pay overtime to 2,400 claims adjusters who argued that they are not exempt "administrators," but more like production workers.

Overtime-pay cases are multiplying because more workers are employed in positions that employers commonly claim are exempt, and because the workweek is steadily growing longer.

Average overtime for manufacturing workers has inched up from 2.8 hours a week in 1980 to the current 4.4 hours a week.

It's far more difficult, however, to gauge the workweek for white-collar workers, whose employers are not subject to the same record-keeping provisions.

One way to establish an accurate picture of the number of hours logged by managers and professionals is to dig down into industry studies.

A survey of workers in the fast-growing medical-device industry, for example, found that employees average 50 hours a week. Professionals in that industry average 50 to 59 hours a week, with an additional 8 percent putting in 60 hours a week or more.

Mr. Martin believes "many employers play the classification game to skirt the overtime issue," but notes that the law is often unclear.

Mr. Ghio agrees, noting that "sorting out the white-collar exemptions is difficult, because the statute and regulations really haven't kept up with the changing workforce, so often you are trying to force square pegs into round holes."

The concept of the exempt white-collar worker was developed by the Department of Labor more than 50 years ago, according to Charles G. Tharp, professor of human-resource management at Rutgers University.

"It was based upon a world of work that was much different from the world we live in today," he says. "Reform in this area is long overdue."

Workers who are classified as exempt but feel they are being asked to work an excessive amount of overtime should consider taking action, says John A. Challenger, CEO of Challenger, Gray & Christmas Inc., an outplacement firm.

"Talking with the boss or human resources might be a start," he says. "If there seems to be no viable recourse, and there is little else redeeming about the job, then it would make sense to start looking for a better place to work."

The work you actually do – not your job title – determines whether you are an exempt employee under the law. Employees with questions about their status under the Fair Labor Standards Act (FLSA) can visit the US Department of Labor's website (www.dol.gov) or call its toll-free help line (1-866-487-9243) for referral to their local labor department office.

Labor Department investigators can protect the anonymity of employees who report possible FLSA violations.

Donna Fields Goldstein, a labor and employment attorney and partner in Manatt, Phelps & Phillips in Los Angeles, notes that white-collar employees should be aware that state law may differ from federal law.

"For example, in California, the salary requirement for an exempt executive or administrative employee is two times the monthly minimum wage or $28,800 per year," Ms. Goldstein says. The outdated federal salary requirement is only $250 a week, or $13,000 a year.

Where state law sets higher standards, it prevails over the federal statute.

If you receive overtime pay, make sure it's for all overtime hours. Generally, all time spent in the service of your employer must be counted in computing your hours. If you eat lunch at your desk and answer the company phone, you should be paid for that time and the hours should be counted in your total for the workweek.

In addition, labor experts recommend checking the pay rate used to calculate overtime pay. Your regular rate includes not only your hourly rate, or your salary divided by the hours you work, but any other forms of pay specified in the FLSA, including promised bonuses. Overtime pay must be at least one-and-one-half times your regular rate.

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