Quick Facts:
- For most occupations overtime wages must be paid after a 40- hour
workweek or a 12-hour workday, whichever yields the highest pay amount.
- Overtime pay is a minimum of 1.5 times the regular rate of pay (regular
pay must at least be equal to the minimum wage).
- Agricultural employees do not have to be paid overtime pay for hours
worked in excess of 40 hours per week given the seasonality of the industry.
- The exemption from overtime pay provisions should be used only for
those workers engaged directly in farm production activities.
The Fair Labor Standards Act serves as the guideline for individual state
minimum wage and overtime laws. Colorado maintains the same standard as
the federal government for overtime wages. The agricultural labor force
has different standards for enforcing overtime pay.
Non-agricultural Overtime Requirements
In most sectors of the economy, overtime pay begins when an employee
has worked more than 12 consecutive hours in a normal workday or more
that 40 hours in a given workweek, whichever calculation yields the highest
total pay for the pay period. Overtime pay is calculated as 1.5 times
the regular rate of pay. The regular rate must be equal to or greater
than the national minimum wage standard. An employer is not allowed to
average two or more consecutive weeks of work time in order to lessen
the amount of overtime paid. If an employee performs work in two or more
positions at different pay rates for the same employer the wage is computed
at the overtime rate based on the regular rate of pay for the position
in which the overtime occurs, or at a weighted average of the rates for
each position if overtime was incurred in both positions.
Salespersons, parts personnel, and mechanics in the automobile, farm
vehicle, aircraft, and recreational vehicle industries are exempt from
these overtime laws. Additionally some commissioned sales personnel, ski
industry personnel, and medical transportation personnel are exempt from
the regulations.
Agricultural Overtime Requirements
Employees who are employed in agriculture (as defined in the Fair Labor
Standards Act) are exempt from overtime pay provisions. They do not have
to be paid 1.5 times their regular rates of pay for time worked in excess
of 40 hours per week. However, agriculture does not include work performed
on a farm that is not incidental to or in conjunction with the farmer’s
agricultural operation. It also does not include operations performed
off a farm if performed by employees who are employed by someone other
than the farmer whose agricultural products are the basis of the work.
Any employee that falls under these two sets of circumstances must be
paid overtime when the proper conditions are met.
Use of the Agricultural Exemption
There has been a lot of legal activity surrounding this debate over what
is an appropriate use of agriculture’s exemption from this law. Given
many employers’ concerns about managing labor-related risk, it is important
to understand if an operation’s employees are truly exempt.
The Department of Labor’s position on the agricultural exemption
is that it should be applied in a limited scope to assure it remains plainly
and unmistakably within their terms and spirit. The agricultural exemption
exists because of the extreme seasonality of many agricultural operations.
This seasonality make an exemption logical since weather, growing seasons,
and perishability of product makes it impossible for farm employers to
avoid overtime during some weeks or months. Moreover, workers in such
markets usually welcome the overtime hours since they can rarely piece
together a full 50-week work year. In short, the labor demand is compressed
into a shorter time frame by factors out of the control of the employer
or the workers.
Yet, livestock operations are still included in the exemption even though
its seasonality is far less prevalent. Some people argue these operations
are still served by such an exemption because live animals require a variable
level of care across days and weeks. For instance, milking cows is related
to a biological function of milk production that the farm employer has
limited control over, thus, making it difficult to accurately plan the
hours of work needed.
The economic rationalization for such an exemption is that the labor demand
cannot be predicted nor managed due to the biological nature of agriculture,
and thus, employers are exempted from a labor standard that would be costly
to them.
Basically, any labor demand directly related to production tasks that
vary with the season, emerging needs of crops or livestock, or that could
not be spread across weeks due to the nature of the work (planting, harvest,
breeding) is exempt. However, those tasks that are more similar to a typical
small business (bookkeeping, routine maintenance of buildings and machinery,
processing, and marketing of products) are less likely to be exempt from
the overtime pay provisions.
For More Information
For further information on minimum wage laws visit the following Web
sites:
- www.dol.gov/dol/asp/public/programs/handbook/minwage.htm - Overtime
discussion from the Department of Labor’s Small Business handbook.
- www.dol.gov/dol/esa/regs/compliance/whd/whdfs23.htm - Fair Labor Standards
information.
- www.nolo.com/encyclopedia/articles/emp/ot_pay.html - A very comprehensive
self-help legal site.
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