Many employees put in overtime hours on a regular basis, but surprisingly few of them actually understand how it works and the laws governing their pay. This article discusses major elements of overtime law that every employee should keep in mind.
What constitutes overtime?
First, it’s important to define overtime: how much work is too much? The FLSA defines overtime as work exceeding 40 hours a week, but the numbers can vary from state to state. Some use a daily overtime plan, where overtime starts after the 8th hour of the day even if the weekly total is under 40 hours.
Who pays overtime?
Most but not all employers in the United States are required to pay employees who work overtime. The first thing an employee has to know is whether his or her company is listed under the Fair Labor Standards Act (FLSA), the government body responsible for wage and hour laws. FLSA-covered companies have to pay overtime according to each state’s regulations. Businesses making at least $500,000 or more a year are generally covered by the FLSA. Smaller companies can still be covered if they perform interstate commerce; that is, if they conduct business (including phone calls and mail) between different states.
Who earns overtime?
Again, most but not all employees can get paid for extra hours worked. While the standards vary by state, the following are generally exempt from FLSA rules and are not entitled to overtime (unless the employer voluntarily pays):
- Employees paid on a monthly salary basis (usually includes people in administrative and executive positions)
- Outside sales people (those who regularly perform their work away from the business)
- Independent contractors
- Computer or IT specialists making at least $27.63 per hour
- Seasonal employees, such as workers in county fairs or ski resorts
- Employees of organizations that operate less than 7 months a year
- Certain newspaper employees, including deliverers
- Criminal investigators
- Casual companionship providers (such as domestic babysitters)
- Volunteers
How is overtime determined?
The FLSA states that people who work overtime are paid “time and a half,” or 50% more per hour than their regular hourly rate. Of course, this is just a general rule–overtime law takes in a number of other factors. In most cases, the premium from which the extra 50% is based may or may not include bonuses, shift differentials and commissions, depending on in-house rules.
This article is not intended as legal advice.
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