My son is 23 and works for a local race car builder. It is a small business in Colorado with only three employees (including the owner).

They are paid once a month (through ADP). Their work week is 45+ hours. The owner claims he does not have to pay overtime since the pay period is figured over a month long period. He says they must work at least 183.3 hours per pay period before he would need to pay overtime, even though they work at least 45 hours every week (180 hours for the month).

This doesn't seem right. How would the pay period affect Colorado's 40 hour week rule?

The owner (who is in this country on a green card) has also effectively told my son he will fire him if he pushes the issue.

CO is not my state, so my answer will be federal rules only. Maybe someone who knows CO can jump in with what I miss.

The month long pay period would have no effect on the overtime laws. There is a possibility however that federal law (FLSA) might not actually apply. It might be necessary to contact CO department of labor directly for a good answer.

http://www.dol.gov/esa/regs/compliance/whd/whdfs14.htm

I would think that a race car builder imports parts from other states; if so, that is "engaged in interstate commerce". Also, the employee is working on product that will very possibly be bought from someone out of state (I doubt that this seller sells only to instate buyers).

Accordingly, I'm seeing that FLSA applies here and that the boss doesn't know the law.

The solution regarding the threat to fire would be for your son to 1) find another job ASAP; then 2) file the claim with the state DOL. Alternatively, just file the claim (don't press it with the employer). It is a violation of public policy (if not specific state "whistleblower" laws) to fire an employee for reporting an alleged violation of law (even if it turns out not to be true which, although not impossible in this case, appears unlikely). One wrongful termination suit would get this guy's attention.

The business does buy parts from out of state, and out of country. They also travel as a team to race tracks in other states and service the cars they build there, at the race tracks.

Does the small size of the company (3 employees) exempt them in any way from the overtime laws? (the owner has stated this, as well as the pay period argument). He has also stated that ADP determines the O/T pay, which I also believe to be false?

Despite the way it sounds, the owner is actually a very nice guy. He may just not understand our laws vs. the ones in England (where he is from).

Thank you very much for the replies.

Does the small size of the company (3 employees) exempt them in any way from the overtime laws?

Not directly. There is that $500K in annual sales rules cited in the prior webpointer I gave you, but that rule is largely offset by the "interstate commerce" clause. There are also a huge number of Exempt exceptions but the "mechanic" related ones would require the employee to be working for a auto dealer, a railroad or an airline.

Take a look at the following.

http://www.dol.gov/esa/regs/compliance/whd/fairpay/fs17i_blue_collar.pdf

http://www.dol.gov/esa/regs/compliance/whd/whdfs23.pdf

Despite the way it sounds, the owner is actually a very nice guy. He may just not understand our laws vs. the ones in England (where he is from).

Thank you very much for the replies.

He very well may not. Perhaps the links that DAW provided will educate him. :)

I am very curious on how this turns out for your son. Please keep us adised on how it goes.