What Should You Know About U.S. Overtime Rules?
You work hard every day when you go to work. You may have to work more than 40 hours per week at some point to catch up on back orders or complete an overdue project. You are excited to use your overtime cash to catch up on some things. However, when your paycheck arrives, the overtime money is missing. What? Your boss was aware that you were putting in additional hours. Should you not have gotten the extra money?
Most companies are required by federal and state legislation to pay overtime. Overtime pay is 50% of the employee’s regular hourly rate. This means that for each extra hour worked, an employee must be paid “time and a half”—the employee’s regular hourly rate plus the 50% overtime premium.
Because these regulations contain several restrictions, not all employees are eligible for overtime pay. Employees eligible for overtime are referred to as “nonexempt,” whereas those who are not are referred to as “exempt.” Today, speak with an employment attorney in Ontario, CA, to learn more.
What counts as overtime?
Most state and federal rules use a weekly overtime standard. Nonexempt workers have the right to overtime pay for every hour worked in excess of 40 in a workweek, regardless of how many hours they work per day. Nathan, for example, is a nonexempt employee who works six hours on Monday and twelve hours on Tuesday (and no other hours throughout the week). Because his total weekly hours do not exceed 40, he is not eligible for overtime under the weekly threshold.
Daily overtime is also required in California and a few other states. This means that nonexempt employees are qualified for overtime pay for every hour worked more than eight in a day. Take Nathan from the last example. Throughout a daily overtime jurisdiction, he would be qualified for overtime compensation for the six additional hours he worked on Tuesday, even though he did not work more than 40 hours throughout the week.
Employers that must pay overtime
Although most companies are mandated to pay overtime, not all are. To determine if your firm is required to pay overtime, first, assess whether you are subject to the federal Fair Labor Standards Act (FLSA), the federal wage and hour statute that governs overtime compensation.
The FLSA generally applies to businesses with yearly sales of $500,000 or more. Even if your firm is small, you must pay overtime if your employees engage in “interstate commerce,” as Congress defines it—that is, they do business across states. This includes making phone calls to or from another state, sending mail out of state, and handling items that have arrived from or will travel to another state.