If you have employees who (a) are paid on a salary basis and (b) earn at least $684 per week, those employees are exempt from overtime (sometimes called a „white collar“ exemption). While most employees are exempt, it`s important to note that if you have an employee who earns less than $684 per week – which equates to less than $35,568 per year – they are eligible for overtime pay. Another case where employers are exempt from paying an overtime rate is working with independent contractors. Since independent contractors are not employees (and generally have more control over their schedule and hours of work), overtime rules do not apply to them. And as an employer, you don`t have to pay independent contractors an overtime rate, regardless of how many hours you work in a work week. In most cases, however, state rules are consistent with overtime laws set out in the FLSA. The Wages and Hours Division of the Department of Labor administers the enforcement of wage laws, including overtime. If someone accuses you of not paying reasonable overtime, this agency will take over the investigation. Employers can force employees to „clock in“ after a normal workday while ordering them to continue working.

If an employer receives the benefits of „overtime“ from an employee, they must pay the employee for that work. Even if an employer has a rule that no employee is allowed to work more than 40 hours per week and an employee works more than 40 hours anyway, the employer still owes that employee overtime pay. In addition, some employers have even signed contracts stipulating that they will not be paid overtime if they work more than 40 hours. These contracts do not replace the law. Employees must continue to be paid overtime, regardless of the contract. The Fair Labour Standards Act (FLSA) requires employers to pay employees for overtime. If you operate a business that employs skilled workers, you cannot ask them to give up any additional remuneration earned by working more than 40 hours per week. In addition, you must pay your overtime immediately on the regular pay day of the period. Overtime pay generally refers to the money an employee earns by working more than 40 hours per week. Under federal law, overtime pay must be at least one and a half hours of the employee`s standard wage.

While some workers may be exempt from overtime, most non-exempt workers are eligible under federal and state law to receive overtime pay in excess of 40 hours of work per week. Some states may also have a daily overtime law that requires employers to pay workers who stay more than their daily norm over a 24-hour period. On May 18, 2020, the U.S. Department of Labour announced a final regulation to remove partial lists of establishments that do not or could not have a „retail concept“ under the Fair Labour Standards Act. For more information, see www.dol.gov/agencies/whd/overtime/2020-7i. Travis received his J.D. from the University of Houston Law Center in 2017 and his B.A. with honors from the University of Texas in 2014.

Travis has written on many legal topics, from articles that follow every Texas Supreme Court decision to the Virtual Reality Act. In his spare time from the legal world and seeking knowledge, this 3rd degree black belt and certified instructor strives to work with various charities focused on access to entertainment and games for all. That depends. If your employees are eligible for overtime pay under federal and state law, it`s illegal not to pay them overtime — but if labor law considers them exempt from overtime pay, you`re not required by law to pay overtime. Employers who do not pay overtime may owe workers wages, lump sum damages, and even the employee`s legal fees. In addition, the Department of Labor (DOL) has the authority to impose penalties for repeated or intentional violations. Now, let`s change it again – instead of an hourly employee, an exempt employee paid $900 a week works 40 hours a week plus five hours of overtime. Since they are exempt and paid on a salary basis and their salary is more than $684 per week, they are not entitled to overtime. So even if they worked more than 40 hours a week, as an employer, you only have to pay them their regular salary (which in this case is $900 for the week) – and you`re not legally required to pay them overtime pay. There is no limit to the number of hours an employee can work in each work week, and you do not have to pay overtime to work on Saturdays, Sundays, holidays or regular rest days, unless overtime is worked on those days.

Employers can create their own overtime policies using useful online HR resources such as the Society of Human Resources Managers (SHRM). Our experts recommend that business owners write the first draft before asking for help.