Overview: Overtime laws are simple, right? When employees work more than 40 hours in a week, you pay them one and a half times their regular rate of pay, right? An employee who earns $10 an hour must be paid $15 an hour for every hour after 40, right?
While that general rule holds true in most cases, there are many variations that can complicate matters quickly. For example, what if an employee receives a bonus or a commission? In some cases, those payments must be factored in to the regular rate of pay. Or, what if an employee performs different jobs at different rates of pay for the same employer?
Also, not all employees need to be paid overtime on the basis of a 40-hour workweek. Certain unionized employees, medical care providers, police and firefighters can be paid according to alternative work periods as long as 28 days.
In addition, overtime laws vary among the states so it's critical that an employer follow state law when calculating employee overtime.
Trends: Employees continue to file, and win, lawsuits seeking unpaid overtime at a rapid pace. At the same time, the federal government and state labor agencies are enforcing overtime laws more aggressively than ever. There appears to be no end in sight to this trend, and employers should remain vigilant in complying with overtime laws.
Author: Michael Cardman, Legal Editor
Updated to reflect IRS final regulations defining 'spouse' for federal tax and benefits purposes.
Several states have filed a lawsuit asking a federal court to nullify new Fair Labor Standards Act (FLSA) overtime regulations from the US Department of Labor (DOL) before they take effect December 1.
Effective December 1, 2016, new regulations from the US Department of Labor will raise the minimum salary for most employees exempt from the overtime requirements of the Fair Labor Standards Act (FLSA) from $455 per week to $913 per week. This calculator can help an employer estimate the costs of different options for compensating employees who are currently classified as exempt but are paid a salary of less than $913 per week.
HR guidance on complying with federal and state employee overtime laws. Support on following rules and regulations regarding this employment law topic.