Is Overtime Calculated Daily or Weekly?
The Fair Labor Standards Act (FLSA) protects non-exempt workers by requiring employers to pay these employees a higher wage rate for the hours they work over 40 hours in a workweek. However, some states have laws that calculate overtime on a daily basis.
These laws and regulations are implemented in order to protect workers from being wrongfully taken advantage of when scheduling their working hours. In this article we will discuss further into detail the nuances of overtime pay and how your organization can best manage the regulations and processes.
What is overtime?
Overtime is a boosted pay rate granted to employees who work beyond a specified set of hours. It is important to understand the requirements involving overtime pay and how those regulations affect each of your employees. If you have some employees in California and some in Tennessee, you will need to evaluate each of the employees differently in regards to overtime pay.
For non-exempt employees, overtime is considered to be at least one and a half times the typical pay rate for any hours worked above 40 in a given week. There are however stipulations with overtime, and more specifically with how it is calculated.
Is overtime calculated daily or weekly?
Federally, overtime is calculated weekly, however there are some states with laws that calculate overtime on a daily basis. Currently there are 5 states along with the Virgin Islands and Puerto Rico, who have daily overtime laws on the books.
For the state of California, any hours worked beyond 8 in a single day and the first 8 hours of the seventh working day in a given week are to be paid at least time and a half of the normal pay rate. If an employee works beyond 12 hours at any given time or beyond the 8 hour marker on the 7th consecutive work day, then they are to receive at least two times the typical pay rate.
States, such as Tennessee, who do not have specific overtime laws, will divert to the federal laws regarding overtime. These laws are based on a weekly overtime rate of 40 hours per week. Each state is required to abide by the federally mandated overtime schedule should they not have state regulated policies that will supersede the federal regulations.
How is overtime determined? / Who gets overtime?
Non-exempt employees are typically hourly workers and are subject to federal and state overtime laws. The Fair Labor Standards Act (FLSA) protects non-exempt employees.
On the other hand, exempt employees do not qualify to receive overtime pay. Certain job duties qualify individuals for exempt status, such as executive, administrative, professional, computer, and outside sales roles. These roles are typically based on a yearly salary and are not subject to overtime laws. Make sure you are aware of which employers are exempt and which are not. Keep all employee status information well documented, or consider utilizing an HRIS system.
Overtime is ultimately determined by the federal government who states that overtime must be paid out at one and a half times or more of the normal hourly rate. This means that organizations can choose to pay out more overtime if they wish, they must simply meet the minimum standard as federally mandated.
State governments who have implemented overtime laws may also adjust the minimum, as California has once an employee surpasses 12 hours in any given work day. Instead of one and half times, they will be paid two times the normal hourly rate.
What should employers know about overtime?
Employers should be familiar with the state regulations regarding overtime pay. As previously stated there are some states that maintain their own overtime laws, whilst some maintain the federal laws. If a company is operating in multiple states it is all but essential that they are fully aware of all laws and regulations regarding overtime in each state in which they operate.
One way companies can streamline this process is by investing in an HRIS system that can help manage overtime and track specific hours worked. An HRIS such as BerniePortal can account for any daily or weekly overtime.As we have noted, there are two employee classifications. They are exempt and non-exempt. Ensuring that these employees are correctly classified is crucial for accurately assessing overtime owed.
It is important to have employees correctly documented according to their status, so that they can receive the correct pay rates when they work beyond the specified hours in a given day or week. Consider utilizing an HRIS system such as BerniePortal for help with managing your employee overtime needs.
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