Overtime Pay Labor Law
Overtime Pay Requirements of the FLSA
What Is Overtime?
Overtime is the amount of time someone works beyond normal working hours. For covered, nonexempt employees, the Fair Labor Standards Act (FLSA) requires overtime pay at a rate of not less than one and one-half times an employee’s regular rate of pay after 40 hours of work in a workweek. The U.S. Department of Labor Employment Standards Administration Overtime Fact Sheet entitled Overtime Pay Requirements of the FLSA states that “An employer who requires or permits an employee to work overtime is generally required to pay the employee premium pay for such overtime work.”
Unless specifically exempted, employees covered by the FLSA must receive overtime pay for hours worked in excess of 40 in a workweek at a rate not less than time and one-half their regular rates of pay. There is no limit in the FLSA on the number of hours employees age 16 and older may work in any specific workweek.
The FLSAt applies on a workweek basis. An employee’s workweek is a fixed and regularly recurring period of 168 hours — seven consecutive 24-hour periods. The work week 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, however, 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.
The regular rate of pay cannot be less than the minimum wage. The regular rate includes all remuneration for employment except certain payments excluded by the FLSA itself. Payments which are not part of the regular rate include pay for expenses incurred on the employer’s behalf, premium payments for overtime work or the true premiums paid for work on Saturdays, Sundays, and holidays, discretionary bonuses, gifts and payments in the nature of gifts on special occasions, and payments for occasional periods when no work is performed due to vacation, holidays, or illness.
Earnings under the FLSA may be determined on a piece-rate, salary, commission, or some other basis, but in all such cases the overtime pay due must be computed on the basis of the average hourly rate derived from such earnings. The employee’s regular rate of pay is calculated by dividing the total pay for employment (except for the statutory exclusions set forth above) in any workweek by the total number of hours actually worked by the employee.
Some exceptions to the 40 hours per week standard apply under special circumstances to police officers and firefighters employed by public agencies and to employees of hospitals and nursing homes.
Federal Overtime Labor Law Versus State Overtime Labor Law
Some states also have enacted state-specific overtime laborlaws. Where an employee is subject to both the state and federal overtime labor laws, the employee is entitled to overtime according to the higher standard (i.e., the standard that will provide the higher rate of pay).