Shanu Singh Guliani

40Hrs
March 4, 2007

Despite the state and federal laws governing pay, many companies still have trouble getting it done correctly, which means lost wages for some workers. Have a look at the following rules governing overtime compensation.

Do I have to pay my employees overtime?

Federal and state laws require most employers to pay overtime (the primary federal law being the Fair Labor Standards Act, or FLSA). The overtime premium is 50% of the employee’s usual hourly wage. This means an employee who works overtime must be paid “time and a half”—the employee’s usual hourly wage plus the 50% overtime premium—for every overtime hour worked.

These laws contain many exceptions, so not all employees are entitled to overtime. Employees who are eligible for overtime are called “non-exempt” employees, and those who are not eligible for overtime are called “exempt” employees.

Which types of employees are exempt?

1. Executive. At least 50 percent of the time is spent managing the enterprise or a department of the enterprise in which he or she is employed.
2. Professional. Performance of work requires advanced knowledge acquired by a prolonged course, or primarily performs original and creative work in a recognized field or artistic endeavor or is a teacher.
3. Administrative. Primarily performs office or nonmanual work directly related to management policies or general business operations.

Because the Fair Labor Standards Act is not written in layman’s terms you may want to check with a lawyer to see which of your employees qualify for overtime pay.

Posted by Shanu Singh Guliani on March 4, 2007 | Comments (0)