Did you know that if certain employees work past 40 hours in a workweek, they are entitled to receive overtime pay? Employers need to be aware of the current and upcoming labor laws regarding overtime rules so they can ensure they are complying with federal and state rules. Let’s cover a few key points and find out where to go for additional information.
What is Overtime Pay and Who Gets It?
Under the Fair Labor Standards Act (FLSA), any nonexempt employee that works more than 40 hours in a workweek is to be paid one and a half times their regular pay rate, commonly referred to as “time and a half”. In some states, such as California, nonexempt employees are also entitled to overtime pay if they work more than 8 hours in a workday. Nonexempt employees earn double time for hours worked in excess of 12 hours in any workday and for hours worked in excess of 8 hours on the seventh consecutive day of work in a workweek. Keep in mind that there are exceptions to the 40-hour per week standard for employees of hospitals, nursing homes, police officers, and firefighters. A workweek is any fixed or regularly recurring period of 168 hours.
Whether an employee is exempt or not is based on their primary duties, a minimum salary threshold, and payment on a salary basis. The various types of FLSA white-collar exemptions are listed here:
- Executive exemption
- Administrative exemption
- Professional exemption
- Computer-related occupation exemption
- Highly-compensated employee (HCE) exemption
- Outside sales exemption
Changes for 2020
Effective January 1, 2020, the standard salary level at which employees remain nonexempt and must receive overtime pay for working more than 40 hours a week increases to $684 per week. The salary level for HCEs to qualify for exemption, even if they don’t meet all of the duties of the white-collar exemptions, also increases to $107,432.
What Employers Should Know
- Employers must count all hours that employees work, not including paid or unpaid meal breaks, if the employee is relieved of duties during that period.
- Employers cannot offer “comp time” to avoid paying overtime pay.
- There is no requirement to pay double time if extra hours worked are worked nights, weekends, or holidays.
- Each state may have their own rules that take precedence over Federal laws. Check with your state for the most current wage and labor rules and standards. Check with the U.S. Department of Labor Wage and Hour Division for more information on Overtime Pay.
About Business Consumer Alliance
Business Consumer Alliance (BCA) is a non-profit company that started in 1928. The broad purpose of BCA is to promote business self-regulation. BCA's mission is achieved by assisting consumers in resolving complaints with businesses and using that complaint information, along with other relevant information such as customer reviews, to forecast business reliability. With community support, BCA can identify trustworthy and ethical businesses and warn the public to avoid unscrupulous businesses whose purpose is to defraud the marketplace. BCA also helps businesses promote themselves by providing services and tools to protect their business and reach out to their customers. BCA obtains its funding from member businesses who support the mission and purpose of the organization and who agree to abide by high standards of ethical business practices.