Federal Overtime Rules

• The Fair Labor Standards Act sets the minimum overtime requirements for all employers, including construction companies, in all states across the country. As a construction business owner, you must pay your employees an overtime wage for each hour over 40 worked over the course of a given seven-day workweek. Overtime pay is equal to one and a half times normal worker hourly pay. For example, if your construction employees earn $20 per hour normally, the overtime wage for these workers is $30 per hour.
  
  

State Overtime Laws

• The state you do construction business in may have additional requirements for overtime pay specific to the construction industry or as general additions to the federal overtime pay law. For example, California law requires overtime pay rates for employees working more than eight in hours a shift or more than 40 hours in a week. California law also requires double-pay for employees working more than 12 hours in a single shift. You must use the federal overtime rules if your state's overtime laws are less restrictive. Failure to properly pay overtime wages can result in civil penalties and investigations from state or federal labor departments.
  
  

Independent Contractors

• When your construction business hires an independent contractor, you negotiate a labor agreement detailing all working parameters from operating hours to total rate of pay. You are not under any obligation to pay an independent contractor an overtime wage because the contractor is not an employee and is therefore exempt from overtime rules under the Fair Labor Standards Act. You must still comply with all contract provisions. If your contractor agreement contains a clause allowing for a higher pay rate for additional hours of work, you must pay the appropriate wage to remain in agreement with the contract.
  
  

Collective Bargaining Agreements

• A collective bargaining agreement between a construction worker's union and your business usually exempts employees from overtime wage laws if the union workers earn a wage which is 30 times higher than the state minimum wage according to the California Department of Industrial Relations. A collective bargaining agreement may include a provision that compensates union workers for participating in voluntary overtime hours at an increased pay rate which you negotiate with the labor union.