Changes in overtime happen frequently. In 2016, for example, an overtime rule was put in place that was then halted by a federal judge. It can be difficult to keep up with the changes. But if you need to know what the current and most important information is for your overtime policy, we want to provide a quick reference guide. As always, consult your HR department or an employment law expert to make sure you’re compliant with the latest federal and state guidelines.
General Overtime Guidelines
In general, any employee working more than 40 hours during a work week is entitled to overtime compensation. The workweek isn’t necessary based on calendar days and can start on any day of the week, which means that even employees working non-traditional schedules are eligible.
Exempt and Nonexempt Status
Where it becomes tricky are the classifications of exempt and non-exempt employees. To be considered exempt, an employee must meet three specific criteria. They must be paid at least $23,600 per year, paid on a salary basis, and perform job duties considered exempt, which can be found in the Fair Labor Standards Act. A company found paying nonexempt employees using exempt rules can be subject to severe penalties.
At Least Time and a Half
Overtime pay must be at least time and half. Which means if someone works more than 40 hours in a work week, the additional time needs to be paid at one and half time what the employee normally earns. For example, if an employee is paid $10 per hour, their overtime pay will be $15. However, companies can elect to pay double time in certain instances as well.
State Law Compliance
While the FLSA creates federal guidelines for employment standards and overtime pay, there may also be specific state laws that apply. Before you create your overtime policy, it’s important you consult an expert in employment law to ensure you’re meeting all the necessary requirements. It’s essential that you maintain this compliance so you and your employees will be protected and to promote job satisfaction.
Do you have more questions about overtime? Contact the team at Harvard Resource Solutions Staffing Agencies in Detroit MI today.