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Overtime Pay
Under the provisions of the Fair Labor Standards Act (FLSA), covered, nonexempt employees who work more than 40 hours in a workweek are entitled to overtime pay in the amount of at least one-and-a-half times their normal rate of pay for that time. Not all employees are entitled to overtime compensation under the FLSA. Some employees may be entirely exempt or only partially exempt.
Workweek
According to the FLSA, the workweek is any fixed, regularly recurring period of 168 hours or seven consecutive 24 hour periods. The workweek does not have to correspond to the calendar week. Employees who work for the same employer can have different workweeks.
Employers are not permitted to average time over two or more workweeks when computing overtime. Additionally, employers are required to pay overtime wages on the regular pay day for the period of time the overtime was worked.
Regular Rate of Pay
Overtime pay is not only due to employees who are paid hourly rates. Whether the employee is salaried or receives commissions or some other rate of pay, employers are required to pay overtime wages to them so long as they are not exempt under the FLSA.
To compute overtime pay, employers are required to take the employee's regular rate of pay and determine what the hourly rate of pay would be. The FLSA lists types of pay that are exempt when computing an employee's regular rate of pay, including:
- Overtime pay
- Premium pay for holidays, weekends
- Vacation, holiday and sick pay
- Discretionary bonuses and gifts
- Expenses incurred on the employer's behalf
Once all of the exemptions have been removed, the standard formula for computing the hourly regular rate of pay is:
The total pay for employment in any workweek ÷ the total number of hours actually worked
However, there are other formulas for determining the rate of overtime, depending on the type of employment arrangement and form of compensation. For example, there is a different formula for computing the regular hourly rate of pay for employees who work two or more types of jobs with different pay rates during a workweek. The formulas used to compute overtime can be found at Title 29 of the Code of the Federal Regulations Sections 778.415-778.421.
Contact an Attorney
Employers cannot eliminate an employee's rights to overtime compensation under the FLSA by stating they will not offer overtime hours or will not pay for overtime unless it is preapproved. Employers also cannot contract out of the FLSA requirements by having employees sign an agreement that they will only work 40 hours per week. Neither can employees waive their rights to overtime compensation. Contact an employment law attorney experienced in wage and hour law to learn more about your rights to overtime pay.
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