How to Calculate Overtime Pay and Proper Pay Period and When Employers Must Pay

OvertimeThe federal overtime provisions are prescribed in the Fair Labor Standards Act (FLSA). Unless you are exempt, you are covered by the Act and must receive overtime pay if you work more than 40 hours in a workweek.   The hourly rate must not be less than 1.5 times their regular rates of pay. There is no limit in the Act on the number of hours employees aged 16 and older may work in any workweek. The Act does not require overtime pay for work on Saturdays, Sundays, holidays, or regular days of rest, unless overtime is worked on such days.

The Act applies on a workweek basis. An employee’s 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. Averaging of hours over two or more weeks is not permitted. Normally, overtime pay earned in a particular workweek must be paid on the regular pay day for the pay period in which the wages were earned. Refer to overview provided by Department of Law.

The Fair Labor Standards Act (FLSA) is administered by the Wage and Hour Division (WHD) of the Department of Labor. The Act establishes standards for minimum wages, overtime pay, recordkeeping, and child labor. These standards affect more than 130 million workers, both full‑time and part‑time, in the private and public sectors. The Act applies to enterprises with employees who engage in interstate commerce, produce goods for interstate commerce, or handle, sell, or work on goods or materials that have been moved in or produced for interstate commerce. For most firms, a test of not less than $500,000 in annual dollar volume of business applies (i.e., the Act does not cover enterprises with less than this amount of business).

However, the Act does cover the following regardless of their dollar volume of business: hospitals; institutions primarily engaged in the care of the sick, aged, mentally ill, or disabled who reside on the premises; schools for children who are mentally or physically disabled or gifted; preschools, elementary and secondary schools, and institutions of higher education; and federal, state, and local government agencies.Employees of firms that do not meet the $500,000 annual dollar volume test may be covered in any workweek when they are individually engaged in interstate commerce, the production of goods for interstate commerce, or an activity that is closely related and directly essential to the production of such goods. In addition, the Act covers domestic service workers, such as day workers, housekeepers, chauffeurs, cooks, or full‑time babysitters, if they receive at least $1,700 in 2009 in cash wages from one employer in a calendar year, or if they work a total of more than eight hours a week for one or more employers.

 

About Roland

Roland was born in Nashville, Tennessee and raised in Mt. Juliet, Tennessee. The first few years he resided in Paris, France with his mother who was French. In Hendersonville, he attended Beech Senior High School where played soccer and studied in the honors curriculum. Subsequently, he pursued two majors in political science and economics while graduating in three years.

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