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What is Overtime Pay

Overtime Law

What is Overtime?  Who is eligible to receive this benefit and how is it calculated?  How do I know if my employee is eligible to receive overtime compensation?  Many employers have questions regarding this component of the Fair Labor Standards Act, also known as the FLSA and the requirements of what is necessary to stay in compliance when operating a business and properly compensating their employees. 

Overtime Explained and Who is Eligible

According to the U.S. Department of Labor (DOL) Wage and Hour Division (WHD) “The federal overtime provisions are contained in the Fair Labor Standards Act (FLSA). Unless exempt, employees covered by the Act must receive overtime pay for hours worked over 40 in a workweek at a rate not less than time and one-half their regular rates of pay. There is no limit in the Act on the number of hours employees aged 16 and older may work in any workweek. The Act does not require overtime pay for work on Saturdays, Sundays, holidays, or regular days of rest, unless overtime is worked on such days.

The Act applies on a workweek basis. An employee's workweek is a fixed and regularly recurring period of 168 hours — seven consecutive 24-hour periods. It need not coincide with the calendar week, but may begin on any day and at any hour of the day. Different workweeks may be established for different employees or groups of employees. Averaging of hours over two or more weeks is not permitted. Normally, overtime pay earned in a particular workweek must be paid on the regular pay day for the pay period in which the wages were earned.”

If you are unsure about whether a particular employment situation is covered by the FLSA, you should review the FLSA Coverage and Employment Status Advisor. One particular exemption, FLSA section 13(a)(1), exempts from both minimum wage and overtime pay protections bona fide executive, administrative, professional and outside sales employees. FLSA sections 13(a)(1) and 13(a)(17) also exempt certain employees in computer-related occupations. The FLSA contains several other exemptions from the minimum wage and/or overtime pay protections which are not covered in this Advisor.

Which Employees are Exempt From Federal Overtime Law

  1. Executive, administrative, and professional and outside sales employees who are paid on a salary basis
  2. Independent contractors
  3. Who work in a job governed by some other specific federal labor law, such as Railroad workers and many truck drivers
  4. Certain computer specialists (such as systems analysts, programmers, and software engineers) who earn at least $27.63 per hour
  5. Volunteer workers (rarely applies to for profit companies)
  6. Employees of organized camps, religious or nonprofit educational conference centers that operate for fewer than seven months a year
  7. Employees of seasonal amusement or recreational businesses, for example ski resorts or county fairs
  8. Employees of certain small newspapers
  9. Newspaper deliverers
  10. Workers engaged in fishing operations
  11. Seamen on a vessel other than an American vessel
  12. Certain switchboard operators
  13. Employees that work on small farms
  14. Baby sitters

This is only a partial listing of the exempt employees that are the most common.  You can learn more about these exemptions by visiting the Department of Labor’s web site at www.dol.gov.

What is a Non-Exempt Employee?

A non-exempt employee is an employee who is “not exempt” from FLSA requirements.  These employees are hourly workers who earn at least the federal minimum wage and must be paid time and a half for overtime hours worked.  The FLSA provides these regulations to protect employees who are working in the private sector.

You can view our Blog article What is a Non-Exempt Employee for more information on this topic.

Overtime Laws and Rules for Each State

 Overtime Pay

The FLSA standards apply to all of the states as bare minimum requirements, whether they have their own overtime standards or not. Besides the FLSA, some states have their own overtime laws and some that do not.  Of the states that have overtime laws some are the same as the Federal Law and some have higher standards than the Federal Law. Where the federal and state laws have different standards, the higher of the two standards applies.

The following is a summary of the states and their overtime law or regulations. Some states may have more exemptions and/or exceptions than what is listed below. As with any other legal matter you should contact your state’s Department of Labor or your company attorney to get the most up to date and accurate information.

Sink into Overtime Pay for States

State Overtime Laws Weekly and Daily: 

 

Alabama

  • No overtime provisions.

Alaska

  • Time and a half after 8 hours per Day
  • Time and a half after 40 hours per Week
  • Employment overtime laws apply to: Employers of 4 or more employees; commerce or manufacturing businesses.

Notes: Voluntary flexible work hour plan of 10-hour day, 40-hour Week, with premium pay after 10 hours is permitted.

Arizona

  • No overtime limits for private sector employers.

Arkansas

  • Time and a half after 40 hours per Week
  • Employment overtime laws apply to: Employers of 4 or more employees.
  • Employment excluded from overtime laws: Employment that is subject to the FLSA.

Notes: Employees in retail and service establishments who spend up to 40% of their time on nonexempt work must be paid at least twice the state's minimum wage ($572 per Week).

California

  • Time and a half after 8 hours per Day; after 12 hours, double time
  • Time and a half after 40 hours per Week  
  • On 7th day: Time and a half for the first 8 hours; after 8 hours, double time
  • Employment excluded from overtime laws: Computer software employees, who design, develop, create, analyze, test, or modify programs using independent judgment, or who are paid at least $45.84/hour.

Notes: Alternative four 10-hour day work Week is permitted, if established prior to 7/1/99. 7th day premium pay not required when employee works no more than 30 hours per Week or 6 hours per day.

Colorado

  • Time and a half after 12 hours per Day
  • Time and a half after 40 hours per Week
  • Employment overtime laws apply to: Employees in retail and service, commercial support service, food and beverage, health and medical industries. 

Connecticut

  • Time and a half after 40 hours per Week
  • Premium pay on Weekends, holidays, or 6th or 7th consecutive day

Notes: In restaurants and hotels, time-and-a-half pay required for the 7th consecutive day of work or for hours that exceed 48 per Week.

Delaware

  • No overtime provisions.
  • District of Columbia
  • Time and a half after 40 hours per Week

Florida

  • No overtime provisions.

Georgia

  • No overtime provisions.

Hawaii

  • Time and a half after 40 hours per Week
  • Dairy, sugar cane, and seasonal agricultural work: 48 hours per Week.
  • Employment excluded from overtime laws: Employees earning guaranteed compensation of $2,000 or more per month.

Idaho

  • No state overtime rules that differ from FLSA.

Illinois

  • Time and a half after 40 hours per Week
  • Employment overtime laws apply to: Employers of 4 or more employees.

Indiana

  • Time and a half after 40 hours per Week
  • Employment excluded from overtime laws: Employment that is subject to the FLSA, movie theaters, seasonal camps and amusement parks, FLSA-exempt nonprofits.

Notes: Collective bargaining agreements ratified by the NLRB may have different overtime provisions. Domestic service work is not excluded from overtime laws.

Iowa

  • No state overtime limits.

Kansas

  • Time and a half after 46 hours per Week
  • Employment excluded from overtime laws: Employment that is subject to the FLSA.

Kentucky

  • Time and a half after 40 hours per Week
  • Employment excluded from overtime laws: Retail, hotel, and restaurant businesses.

Notes: 7th day, time and a half.

Louisiana

  • No overtime provisions.

Maine

  • Time and a half after 40 hours per Week
  • Employment excluded from overtime laws: Auto mechanics, parts clerks, and salespersons; hotels, motels, and restaurants; canning, freezing, packing, and shipping produce and perishable foods.

Notes: Employee cannot be required to work more than 80 hours of overtime in any 2-Week period.

Maryland

  • Time and a half after 40 hours per Week; 48 hours for bowling alleys and residential employees caring for the sick, aged, or mentally ill in institutions other than hospitals; 60 hours for agricultural work.

Massachusetts

  • Time and a half after 40 hours per Week
  • Employment excluded from overtime laws: Agriculture, farming, fishing; hotel, motel, or restaurant; seasonal workers less than 5 months; hospital, nursing home, or rest home; public transit. 

Notes: Time and a half as overtime unless already paid that rate as part of regular compensation.

Michigan

  • Time and a half after 40 hours per Week
  • Employment overtime laws apply to: Employers of 2 or more employees.
  • Employment excluded from overtime laws: Employees not subject to state minimum wage laws.

Minnesota

  • Time and a half after 48hours per Week

Mississippi

  • No overtime provisions.

Missouri

  • Time and a half after 40 hours per Week; 52 hours for seasonal amusement or recreation businesses
  • Employment excluded from overtime laws: Employment that is subject to the FLSA; retail or service business with gross annual sales or contracts of less than $500,000.

Montana

  • Time and a half after 40 hours per Week; 48 hours for students working seasonal jobs at amusement or recreational areas

Nebraska

  • No overtime provisions.

Nevada

  • Time and a half after 8 hours per Day
  • Time and a half after 40 hours per Week
  • Employment excluded from overtime laws: Businesses with a gross annual sales volume of less than $250,000.

Notes: Employer and employee may agree to flextime schedule of four 10-hour days.

New Hampshire

  • Time and a half after 40 hours per Week
  • Employment excluded from overtime laws: Employees covered by the FLSA; employees in amusement, seasonal, or recreational business open 7 months or less a year.

New Jersey

  • Time and a half after 40 hours per Week
  • Employment excluded from overtime laws: June to September: Summer camps, conferences, and retreats operated by nonprofit or religious groups.

New Mexico

  • Time and a half after 40 hours per Week

New York

  • Time and a half after 40 hours per Week for nonresidential workers; 44 for residential workers
  • Employment excluded from overtime laws: Same exemptions as FLSA.

North Carolina

  • Time and a half after 40 hours per Week; 45 hours a Week in seasonal amusement or recreational establishments
  • Employment excluded from overtime laws: Employment that is subject to the FLSA.

North Dakota

  • Time and a half after 40 hours per Week; 50 hours per Week, cab drivers
  • Employment excluded from overtime laws: Computer professionals, who design, develop, create, analyze, test, or modify programs using independent judgment or who are paid at least $27.63/hour.

Ohio

  • Time and a half after 40 hours per Week
  • Employment overtime laws apply to: Employers who gross more than $297,000 a year.

Oklahoma

  • No state overtime provisions.

Oregon

  • Time and a half after 40 hours per Week

Notes: Time and a half required after 10 hours a day in canneries, driers, packing plants, mills, factories, and manufacturing facilities.

Pennsylvania

  • Time and a half after 40 hours per Week

Rhode Island

  • Time and a half after 40 hours per Week

Notes: Time and a half for Sunday and holiday work is required for most retail businesses (these hours are not included in calculating Weekly overtime).

South Carolina

  • No overtime provisions.

South Dakota

  • No overtime provisions.

Tennessee

  • No overtime provisions.

Texas

  • No overtime provisions.

Utah

  • No overtime provisions.

Vermont

  • Time and a half after 40 hours per Week
  • Employment overtime laws apply to: Employers of 2 or more employees
  • Employment excluded from overtime laws: Retail and service businesses if 75% of annual sales not for resale; hotels, motels, restaurants; transportation workers exempt under the FLSA..

Virginia

  • No overtime provisions.

Washington

  • Time and a half after 40 hours per Week

West Virginia

  • Time and a half after 40 hours per Week
  • Employment overtime laws apply to: Employers of 6 or more employees at one location
  • Employment excluded from overtime laws: Employees that are subject to the FLSA.

Wisconsin 

  • Time and a half after 40 hours per Week
  • Employment overtime laws apply to: Manufacturing, mechanical, or retail businesses; beauty parlors, laundries, restaurants, hotels; telephone, express, shipping, and transportation companies.

Wyoming

  • No overtime provisions.

FLSA and Overtime Laws-Important Facts to Remember

  • Weighted standards-sometimes referred to blended standards, employers must take the average of all pay rates and multiply the average by 1.5 to find overtime rate.
  • State vs. federal-Which is considered? When looking at both federal and state laws, whichever law will be most beneficial to the employee should be utilized as a standard.
  • Number of employees to be applicable?  This is dependent on individual state laws, but are not to supercede federal law if not beneficial to employees.  Please click on your state above for further information and to access your state website.

Options to Calculate Overtime

Overtime can be calculated in ways not defined by federal or state laws, as long as employers are providing compensation that is meeting at least the minimum requirements for their states.  Some additional methods to offer and calculate overtime are:

  • Double time 
  • Additional compensation or shift differential for weekend hours
  • Additional compensation or shift differential for night time hours
  • Overtime compensation calculated for any hours worked over 8 hours in a given shift

While these benefits are not required at a federal level, this many times is incentive for employees to work additional hours or shifts that they may not otherwise consider.

What is not Required When Calculating Overtime?

Employers have certain benefits that they may offer to their employees, but that are not required when calculating overtime wages, such as unusual hours, night shift premiums, weekend hours, holidays, paid time off or double time.  While all can be incentives to utilize as part of your employee benefits package, it is not something that is mandated when calculating overtime wages.

Overtime Requirements

Overtime requirements may vary from a federal to a state level, and should be confirmed prior to moving forward with any new changes.  While most states look at overtime as any time worked within the parameters set of any time calculated over forty hours per week, your state could have more specific exemptions that need to be considered when determining overtime.  

To obtain additional information regarding the Department of Wage and Labor, as well as the Fair Labor Standards Act at:  http://www.wagehour.dol.gov  or by calling 1-866-4USWAGE (1-866-487-9243).

  

References:

http://webapps.dol.gov/elaws/elg/minwage.htm

https://www.dol.gov/whd/regs/compliance/hrg.htm#14

https://www.dol.gov/whd/overtime/final2016/

https://webapps.dol.gov/elaws/overtime.htm

https://www.law.cornell.edu/uscode/text/29/213

https://www.employmentlawhandbook.com/federal-employment-and-labor-laws/flsa/exemptions/

Each State’s Department of Labor Websites

 

 

 

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