Understanding your rights regarding overtime pay ensures you receive fair compensation for your hard work. In Wisconsin, both state and federal laws govern overtime pay.
This guide will help you better understand Wisconsin’s overtime and labor laws, identify who is eligible, and outline the steps you should take if you believe you are owed overtime pay.
Since Wisconsin’s regular minimum wage currently holds at $7.25 per hour, the state’s overtime minimum pay is $10.88 per hour (1.5 times the regular rate).
Wisconsin Overtime Rate and Calculation
In Wisconsin, the overtime pay rate is one and a half times (1.5x) your regular hourly rate for any hours worked over 40 in a workweek.
To calculate your overtime pay, use the following formula: Overtime Pay = (Regular Hourly Rate) x 1.5 x (Overtime Hours Worked)
Example: If your regular hourly rate is $15, and you worked 50 hours in a week, your overtime pay would be calculated as follows:
Regular Pay for 40 hours = 40 x $15 = $600
Overtime Pay for 10 hours = 10 x ($15 x 1.5) = 10 x $22.50 = $225
Total Pay for the week = $600 + $225 = $825
Who Is Entitled to Overtime Pay in Wisconsin?
Most employees in Wisconsin qualify for overtime pay under both state and federal laws.
Here’s a breakdown of overtime eligibility:
Hourly Employees: In Wisconsin, hourly employees generally receive overtime pay for working beyond the standard 40-hour workweek.
Non-Exempt Salaried Employees: Salaried employees may qualify for overtime if they don’t meet the exemption criteria. Also, this applies to employees earning below a specific salary threshold or whose job duties don’t match the executive, administrative, or professional exemptions.
Exemptions and Exceptions
Certain employees are exempt from overtime pay under Wisconsin law. Common exemptions include:
Executive, Administrative, and Professional Employees: These employees are exempt if they meet the salary and duties tests as defined by law. They must receive a salary of at least $684 per week.
Outside Sales Employees: Employees primarily engaged in sales work outside the employer’s place of business.
Specific Industry Workers: Certain industries, such as agriculture, seasonal amusement or recreational establishments, and specific transportation jobs, have exemptions under state law.
Tests to Determine Employment Type
To determine if a salaried employee is exempt from overtime, Wisconsin uses specific tests based on both state and federal guidelines:
Salary Basis Test: You must be paid a fixed salary that does not fluctuate based on the number of hours worked.
Salary Level Test: Your salary must meet a minimum threshold set by law.
Duties Test: Your job duties must primarily involve executive, administrative, or professional tasks as defined by the law.
Overtime Pay for Tipped Employees
In Wisconsin, employees who regularly earn more than $30 in tips each month qualify as tipped employees.
Tipped employees in Wisconsin follow the state’s minimum wage laws. As of 2023, the minimum wage in Wisconsin is $7.25 per hour. However, employers are allowed to pay tipped employees a lower direct cash wage, which is currently up to $2.33 per hour.
Tip Credit: Employers can apply for a tip credit against the minimum wage for tipped employees.
Moreover, the tip credit is the difference between the state minimum wage and the direct cash wage paid to the tipped employee.
Also, this means the employer uses the employee’s tips to make up the difference between the tipped minimum wage and the standard minimum wage.
Legal Requirements: According to the Fair Labor Standards Act (FLSA), employers can take a tip credit toward their minimum wage and overtime obligations for tipped employees, as specified in Section 3(m)(2)(A). In addition, the employers who claim a tip credit must ensure that the employee’s total earnings from tips and direct cash wages equal at least the state minimum wage for all hours worked in a workweek.
Furthermore, if the combined total falls short, the employer must make up the difference to meet the minimum wage requirement.
Overtime for Tipped Employees
Tipped employees qualify for overtime pay at one and a half times their regular rate for any hours worked over 40 in a workweek. Also, the calculation for overtime pay must include both the direct cash wage and the tips received to ensure compliance with the law.
Example Calculation: Assume a tipped employee works 50 hours a week and receives a direct cash wage plus tips. In Wisconsin, the tipped minimum wage is $2.33 per hour.
#1: Regular Gross Pay Calculation:
Regular Gross Pay = Tipped Wage x Hours Worked
Tipped Wage (direct cash wage) in Wisconsin: $2.33
Hours Worked: 50
Regular Gross Pay = $2.33 x 50 = $116.50
#2: Calculate Overtime Pay:
Overtime Pay = Tipped Overtime Wage x Overtime Hours Worked
Overtime Wage typically calculated at 1.5 times the tipped minimum wage:
Overtime Wage = $2.33 x 1.5 = $3.50
Overtime Hours Worked: 10 (hours over 40 in a workweek)
Overtime Pay = $3.50 x 10 = $35.00
#3: Calculate Total Gross Pay:
Total Gross Pay = Regular Gross Pay + Overtime Pay
If the tips do not bring the employee’s earnings to at least the standard minimum wage ($7.25 per hour), the employer must make up the difference to ensure compliance with the minimum wage laws.
Ensuring Compliance: Employers must ensure that tipped employees receive at least the full minimum wage when combining their direct cash wages and tips. Moreover, if there is any shortfall, the employer must compensate for the difference.
Steps to Take if You Believe You Are Owed Back Overtime Pay
If you suspect your employer owes you back overtime pay, act promptly. Here are the steps you should take:
Document Your Hours Accurately: Maintain very detailed and concise records of all your work hours. Record any communications with your employer regarding overtime.
Review Your Job Classification: Ensure your job classification (exempt vs. non-exempt) is correct.
Contact Your Employer: Start by discussing your concerns with your employer or HR department.
In Wisconsin, the statute of limitations for filing an overtime claim is generally two years from the date the wages were due. However, if the violation is deemed willful, the statute of limitations extends to three years.
Laws on Mandatory Overtime
Wisconsin labor laws regarding mandatory overtime align with the federal Fair Labor Standards Act (FLSA). Also, employers in Wisconsin can require employees to work overtime. In addition, employers must compensate employees who work overtime at 1.5 times their regular hourly rate for hours worked beyond 40 in a workweek.
Certain employees are exempt from overtime pay: salaried professionals, executives, administrators, and some agricultural and seasonal workers.
Employers do not need to notify employees in advance about mandatory overtime. However, collective bargaining agreements may include specific provisions regarding overtime notice. Therefore, employers and employees must always follow these contractual terms.
Think You Have a Case?
If you believe your employer has violated overtime laws and you are owed back pay, Lemberg Law can help. Our experienced legal team will evaluate your case for free. Call us at 475-277-2200 or complete our online form to get started.
About the Author:
Sergei Lemberg is an attorney focusing on consumer law, class actions related to automotive issues, and personal injury litigation. With nearly two decades of experience, his areas of practice include Lemon Law (vehicle defects), Debt Collection Harassment, TCPA (illegal robocalls and texts), Fair Credit Reporting Act, Overtime claims, Personal Injury cases, and Class Actions. He has consistently been recognized as the nation's "most active consumer attorney." In 2020, Mr. Lemberg represented Noah Duguid before the United States Supreme Court in the landmark case Duguid v. Facebook. He is also the author of "Defanging Debt Collectors," a guide that empowers consumers to fight back against debt collectors and prevail, as well as "Lemon Law 101: The Laws That Lemon Dealers Don't Want You to Know."
