Overtime FAQ: Common OT Questions and Answers Employers Need to Know

The ins and outs of overtime policies can get tricky. From federal government regulations and exempt vs. non-exempt status to everything in between, find out what employers need to know about OT compliance in the workplace using these FAQs.

Q: What is Overtime Pay? 

A: 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.

These laws assure fair workplace standards and require employers to post overtime and minimum wage standards in high-traffic, visible areas in the workplace.

Q: Is Not Paying Overtime Illegal?

A: Yes

Employers are required by law to pay non-exempt employees overtime for every hour worked in excess of 40 hours.

Q: How is Overtime Pay Calculated?

A: According to the Department of Labor (DOL), an employee’s overtime pay rate should not be less than the time-and-a-half of their regular rate of pay.

Q: Are There Exceptions to Overtime Pay Rules?

A: Yes.

Employees that are non-exempt are eligible for OT pay while employees who are classified as exempt are exempt from OT pay.

Q: How Are Employees Classified as Exempt and Non-Exempt?

A: The FLSA requires employers to classify employees as overtime-exempt or non-exempt.

Therefore when classifying employees, it’s important to ask the following questions:

1. How Much Do My Employees Make?

As of January 1, 2020, employees earning less than $35,568 per year or less than $684 per week should be classified as hourly pay, overtime non-exempt.

2. Which Tasks Are My Employees Responsible For?

An employee’s day-to-day duties—not job title—should determine whether an employee is classified as exempt or non-exempt. There is a common misconception that only working-class employees performing manual tasks should be classified as hourly. This is not the case.

Some “white collar” positions should actually be classified as hourly. For instance, many employers wrongly assume that commissioned inside salespeople should be salaried when in fact, these employees should be classified as hourly and overtime non-exempt.

You can check to see if your employees should be classified as hourly or salary using the FLSA duties test. Each of the following six categories outlines duties performed by salary employees:

1. Executives
2. Administrators
3. Professional employees (learned & creative)
4. Outside sales professionals
5. Computer employees
6. Highly compensated employees

3. What Legal Ramifications Exist?

The risk of a lawsuit is highest when employers classify non-exempt employees as exempt. The risk is highest in this scenario because the employer is opening itself up to an argument that the misclassified employees were not paid overtime wages that they should have been paid under the FLSA.

Employers who misclassify employee exemption status on more than one occasion may be subject to civil penalties as well.

Q: What is Considered a Workweek When Determining if an Employee is Owed Overtime Wages?

A: According to the DOL, an employee’s workweek is “a fixed and regularly recurring period of 168 hours,” meaning it must be seven consecutive 24-hour periods.

This period doesn’t need to coincide with the calendar week and can begin on any day and at any time. 

Q: Does Working on the Weekend Count for Overtime Pay?

A: Not automatically.

Employers are required to pay overtime wages to employees on the weekends only if they exceed their weekly threshold of 40 hours on the weekend. 

Q: Does Working on Holidays Count for Overtime Pay?

A: Not automatically.

Employers are required to pay overtime wages to employees on holidays only if they exceed their weekly threshold of 40 hours on the weekend. 

Q: Can Employees Be Forced to Work Overtime?

A: Yes.

Employers can require employees to work overtime in addition to their normal work schedule and they have the right to fire for refusal, according to the FLSA. FLSA sets no limits on how many hours a day or week employers can require employees to work. 

While employers can require employees to work overtime, there are some exceptions. These include union contracts, other employment contracts, computer professionals, workers responsible for childcare, and more.

Q: Do Lunch Breaks Count Toward Overtime Pay?

A: No.

If an employee is relieved of all duties during a bona fide meal period—typically lasting at least 30 minutes—they are not considered working during this time. As a result, these hours do not factor into overtime pay calculations. 

Q: Do Short Breaks Count Toward Overtime Pay? 

A: Yes.

When employees take a break, these rest periods—typically lasting between five and 20 minutes—are considered work time. As a result, these hours do factor into overtime pay calculations.

Q: How Do State Laws Factor Into Overtime Pay?

A: Some states may have more expansive overtime laws than others.

As a result, employers should consult with their state DOL to determine which regulations need to be followed.

Q: Which States Have Daily Overtime Pay Laws?

A: In some states, overtime is calculated on a daily basis, not weekly.

As of 2021, these include Alaska, California, Colorado, and Nevada. Puerto Rico and the Virgin Islands also have these laws as well.

Additional Resources

You can stay informed, educated, and up-to-date with important HR topics using BerniePortal’s comprehensive resources:

• BerniePortal Blog—a one-stop-shop for HR industry news
• HR Glossary—featuring the most common HR terms, acronyms, and compliance
• HR Guides—essential pillars, covering an extensive list of comprehensive HR topics
• BernieU—free online HR courses, approved for SHRM and HRCI recertification credit
• HR Party of One—our popular YouTube series and podcast, covering emerging HR trends and enduring HR topics