Are Small Business Exempt from Paying Overtime

My question involves employment and labor law for the state of: Arizona

I have just completed my first week on a new job as a Security Guard and I did put in more than 40 hours.

The owner of the company said that they don't have to pay Over Time because of an Arizona Law that says any small business that makes less than $500,000 or $1,000,000 per year (she wasn't sure of the exact amount) is exempt.

I scoured through the Arizona Revised Statutes Title 23 which governs Labor Law but couldn't find anything close to what she was saying.

Please assist me in obtaining a fuller understanding if there is one?

Thank You,
HMPhx

Here are the relevant questions from the Arizona Department of Labor FAQ...

Quote:

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Do the requirements of the Arizona Minimum Wage Act apply to all employers?
The Arizona Minimum Wage Act applies to all employers except:
The State of Arizona;
The United States; and
Small businesses that are not subject to the Federal Fair Labor Standards
Act and which have less than $500,000 in gross annual revenue. This
exclusion for small businesses under the Arizona Minimum Wage Act is
very limited. Practically speaking, most Arizona small businesses will be
subject to the Arizona Minimum Wage Act. This is because most
employers, including small businesses, are subject to the Federal Fair
Labor Standards Act. Under the Federal Fair Labor Standards Act
coverage extends in one of two ways: Enterprise coverage or individual
coverage. Employees who work for an “enterprise” that is engaged in
interstate commerce or the production of goods for commerce are covered
under the FLSA. Likewise, regardless of the volume of sales of an
enterprise (more or less than $500,000), individual employees whose work
affects interstate commerce are covered under the FLSA.

Are there any exemptions under the Arizona Minimum Wage Act?
Unlike the Federal Fair Labor Standards Act, the Arizona Minimum Wage Act has very
few exemptions. The Arizona Minimum Wage Act applies to any employee employed by
an employer except the following:
A person who is employed by a parent or a sibling;
A person who is employed performing babysitting services in the
employer’s home on a casual basis;
A person employed by the State of Arizona or the United States
government; and
A person employed in a small business grossing less than $500,000 in
annual revenue, if that small business is not required to pay minimum
wage under the Federal Fair Labor Standards Act. This exclusion for small
businesses under the Arizona Minimum Wage Act is very limited.
Practically speaking, most Arizona small businesses will be subject to the
Arizona Minimum Wage Act. For additional discussion of this exemption,
please see the preceding question.

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Under Federal (not Arizona) law, a business which does less than $500,000 per year AND which does absolutely no interstate commerce whatsoever, is exempt from paying overtime.

The definition of interstate commerce is so broad that virtually no employers are able to meet that prong of the fork. Does the business have any out of state clients? Buy their uniforms from out of state? Are the uniforms MADE out of state? Does she ever have to make so much as an out of state phone call in the way of business?

If she makes under $500,000 per year and absolutely every factor of the business remains within Arizona, then she is right; she is exempt from paying overtime. But if she engages in any form of interstate commerce at all, then she is not exempt from paying overtime, regardless of how much, or how little, the business makes annually.

State law cannot make this Federal requirement go away.

Here is some information for you to show her.

http://www.dol.gov/compliance/guide/minwage.htm

http://www.dol.gov/whd/regs/compliance/hrg.htm

I don't know what type of business this is but it is very, very doubtful that she doesn't engage in some
form of interstate commerce.

Hey All, thank you very much for the input.

You're welcome. :)

If the security guard or maintenance worker is employed in an establishment that is engaged in commerce or in the production of goods for commerce, such as a warehouse, factory, bank, insurance company, etc, he/she is covered by the FLSA.

see this link
http://www.dol.gov/whd/regs/compliance/whdfs4.pdf

Isn't that what we said several days ago?

Actually what Army said was a bit more specific towards Security Guards. After reading his post and following and reading the link, l called the DoL for clairification and learned something quite interesting...

Facts:
1. I work for a company that makes less than $500k per yer.
2. I am posted at a warehouse/plant that ships interstate.

The company I work for does not have to pay overtime but, since I work at a plant that ships interstate, the company that I work for DOES have to pay ME overtime at time and a half. This would only apply to me and not the entire staff of my employer.

So again, thank you to everyone who posted as it led me step by step to uncover the answer.

The law is not, however, specific to security guards. NO non-exempt employee can be refused overtime in an FLSA-eligible business, which covers just about all businesses.