Overtime Calculation Help For Employers and Employees

Overtime is a topic that employers want to avoid and employees want to take advantage. It can be misunderstood and misconstrued so both the employer (especially the employer!) And the employee should take the time to understand how overtime works. First and foremost, detailed information is available through the US Department of Labor's (DOL) and is defined under the Fair Labor Standards Act (FLSA). Secondly, the following information that is provided is an overview only and does not constitute the exact wording of the law.

Overtime is due when a covered, nonexempt employee works over 40 hours in a workweek. A workweek is defined as a fixed and regularly recurring period of seven 24-hour days, 168 hours. Nonexempt employees, that is to say, employees who are exempt from receiving overtime pay, are employees that fit the FLSA definition of administrative, executive, professional, computer employee or outside sales. Their job duties must fall within the FLSA guidelines and their salaries must not be less than $ 455 / week. Other exemptions do exist and more information is available on the DOL website. The overtime rate of pay is not less than one and one-half times the applicable rate of pay. For employees who are paid at multiple pay rates, the DOL website has a guide that helps explain which rate of pay is applicable to the overtime premium.

Accurate records must be maintained for every employee's wages, hours, and conditions of employment. If any company, large or small, is in violation of this act, the DOL can and will sue to protect the employees and recover lost wages. Depending on the size of your company, the fines and back-pay may run into the millions. Be aware of your employees' timesheets and make sure you understand the FLSA overtime rules. States may have their own set of overtime rules and in the event the rules are not the same, the employee is entitled to the overtime at the higher standard or rate of pay. Check with your State Department of Labor to make sure you are in compliance with their regulations as well as the federal regulations.

As an employee, be aware of your hours. After all, every hour worked is a dollar (hopefully more!) Earned. Typically you and your supervisor sign forms that agree to your hours worked per week. If you met the overtime rule and you were not paid the overtime premium, promptly notify your supervisor. It could have been a simple clerical error. If the errors persist or if you are not getting paid the overtime at all, contact Human Resources. If your hours qualify for overtime and you are not getting paid for that overtime worked make sure your voice is heard – you deserve your due!

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