Monday, September 28, 2015

Overtime Payroll Laws

Paycheck with overtime pay


The Fair Labor Standards Act (FLSA) regulates the federal laws concerning overtime pay. Each state has a local Department of Labor (DOL) agency, which sets wage laws for their state as well. Often, the state wage laws mirror those set by the FLSA. If not, the employer should use whichever one benefits the employee the most.


Pay Condition


The FLSA notes that if the employer requires the employee to work overtime, then the employee should be receive premium pay for the additional hours worked. Premium pay is applicable to hours worked outside of normal work hours such as overtime, nights, days off or holidays. The employee must have more than 40 regular hours for the week to qualify for overtime pay. The excess hours worked should be paid (at the least) at his overtime rate, which is time and a half of his regular rate.


Weekends/Nights


The FSLA does not require the employer to pay an employee overtime or double-time pay for working nights or weekends unless the hours result in overtime. Aside from this exception, any extra pay for hours worked on weekends or night is between the employer and the employee.


Exemptions


There is an exemption from overtime pay for executive, professional, administrative, certain computer employees and outside sales workers. To be eligible for this exemption, employees must be paid a salary of no less than $455 per week and satisfy certain criteria.


For instance, to be exempt from overtime pay, an executive must meet the salary requirement; his main responsibility must be managing the establishment or a recognized department within the organization; he must supervise the work of two or more full-time workers; and he must have the authority to hire or fire other employees.


Due Date


Overtime pay should be paid with the employee's normal pay. For instance, if an employee has 40 regular hours and 10 overtime hours in a given week, the employer must pay the total hours (50) on the employee's upcoming pay date.


Breaks


The federal law does not require employers to give employees breaks. However, many employers choose to give their employees coffee or snack breaks lasting between 5 and 20 minutes. The federal law views these breaks as paid time. Therefore, if the employee incurs overtime due to his break periods, he should be paid for the extra time at his overtime rate. If the employee takes more break time than his employer allows, he should not be paid for the extra break time taken.


Rounding


When calculating payroll hours, employers round up and down to the nearest quarter hour. For instance, 8:13 a.m. is rounded up to 8:15 a.m. and 5:06 p.m. is rounded down to 5 p.m. If the employee incurs overtime as a result of rounding, he should be paid for the additional time at his overtime rate.

Tags: should paid, hours worked, overtime rate, break time, does require