- Many workers receive or are due overtime pay.worker image by apeschi from Fotolia.com
While some states have their own wage and overtime laws, the federal Fair Labor Standards Act defines a national policy regarding overtime pay. To cover instances when coverage by state and federal laws differ, the U.S. Department of Labor states that the employer must adhere to the law that gives more coverage and benefits to the employee. - Overtime is work performed beyond 40 hours per week. Overtime work is paid at time and a half. For example, an employee who works 60 hours in a week would be paid for 70 hours: 40 hours of straight time, plus 1.5 multiplied by 20 hours of overtime, which equals 30 hours.
Paid vacation and sick time do not count for overtime, meaning that if an employee works 35 hours and accumulates eight hours of paid sick leave, the extra three hours are paid at the normal rate. - Employers are allowed to record employees' time by rounding up or down to make record-keeping easier, according to the Department of Labor. Primarily, employers can round to the nearest five or 15 minutes. Rounding up and rounding down should balance each other out. If rounding leads to the employee working more than 40 hours, he should be paid overtime.
- For an employer to be required to provide overtime pay, it is required to have interstate business operations and at least half a million dollars in annual sales. A number of employers are required to offer overtime pay regardless of the scope and scale of their operations, including hospitals, care institutions (mental hospitals, retirement homes, etc.), government agencies and schools.
- Not all employees are paid overtime. In general, hourly employees can be paid overtime and salaried workers cannot. The FLSA establishes standards for exemption for executive, administrative, technical, some sales, and professional workers. If an employee satisfies these standards, he is overtime exempt.
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