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.
These laws assure fair workplace standards and require employers to post overtime and minimum wage standards in high-traffic, visible areas in the workplace.
Employers are required by law to pay non-exempt employees overtime for every hour worked in excess of 40 hours.
Employees that are non-exempt are eligible for OT pay while employees who are classified as exempt are exempt from OT pay.
Therefore when classifying employees, it’s important to ask the following questions:
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.
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:
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.
This period doesn’t need to coincide with the calendar week and can begin on any day and at any time.
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.
Employers are required to pay overtime wages to employees on holidays only if they exceed their weekly threshold of 40 hours on the weekend.
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.
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.
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.
As a result, employers should consult with their state DOL to determine which regulations need to be followed.
As of 2021, these include Alaska, California, Colorado, and Nevada. Puerto Rico and the Virgin Islands also have these laws as well.
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