Many employers have questions regarding when overtime must be paid to employees. This post will discuss the federal regulations, but be aware that many states have more stringent guidelines, so be sure to check with your state to find what rules apply to you (A link is provided at the bottom of this post).
The Wage and Hour Division (WHD) of the United States Department of Labor administers the Fair Labor Standards Act (FLSA). This law establishes standards for minimum wage, overtime pay, recordkeeping, and child labor.
The FLSA does not limit the number of hours that an employer may require an employee to work (neither in a day or the number of days in a week), as long as the employee is at least 16 years old. However, the legislation requires employers to pay covered employees not less than one and one‑half times their regular rate of pay for all hours worked in excess of 40 in a workweek, unless the employees are otherwise exempt from overtime.
A workweek is a fixed and regularly recurring period of 168 hours — seven consecutive 24-hour periods. It need not coincide with the calendar week, but may begin on any day and at any hour of the day. Different workweeks may be established for different employees or groups of employees.
Hiring someone as a salaried worker does not mean overtime does not need to be paid if working more than 40 hours. Unless employees fall under the specific categories for all hours worked, overtime will need to be paid. More specific details on who is exempt from overtime will be provided in the next post.
Of course, the best way to avoid the question of when overtime must be paid is to prevent the scenario altogether. However, that may not be feasible, so it’s imperative to understand when overtime rules apply and to properly compensate employees when the situation occurs.
As mentioned above, many states have more strict guidelines regarding when overtime must be paid to employees. To find information regarding rules that apply in your state, see http://www.dol.gov/whd/minwage/america.htm.