Overtime Pay Labor Laws
The federal law requiring employers to pay overtime to employees is the Fair Labor Standards Act (FLSA). Passed in 1938, the FLSA was enacted to ensure a number of different “fair labor standards,” most notably the requirement that most employees be paid overtime. Many states also have adopted wage and hour laws.
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Generally, the FLSA requires most employers to pay overtime to employees who work more than 40 hours in a given workweek at a rate of one and one-half times the employee’s regular rate of pay. There are exceptions to the law for some workers.
Exempt vs non-exempt employees
During the last decade or two, employers have found it increasingly difficult to decide which employees are entitled to overtime. Those classifications are commonly referred to as exempt employees (those who meet the FLSA's requirements to be exempt from overtime pay) and non-exempt employees (employees the law requires to be paid overtime).
The FLSA contains dozens of exemptions, which basically provide that specific categories of employers and employees aren't subject to the Act's overtime requirements. Most common are the “white-collar” exemptions for executive, administrative, and professional employees, computer professionals, and outside sales employees.
Learn more about correctly classifying workers with the Wage and Hour Compliance Manual
Who enforces federal overtime laws?
The Department of Labor’s Wage and Hour Division (WHD) is responsible for administering and enforcing the FLSA. The WHD usually initiates an investigation of an employer’s overtime practices in response to an employee’s complaint.
Isolated complaints on behalf of only one or a few employees may only result in a phone interview and small-scale investigation of the company, called “conciliation.” Multiple violations or complex cases may result in a full investigation by the WHD, involving employee interviews and subpoenas of the company’s records. The WHD administrator also may assess a civil penalty of up to $1,000 per violation for any repeated or willful violation the FLSA’s overtime provisions.
HR Guide to Employment Law: A practical compliance reference manual covering 14 topics, including overtime and FLSA requirements
Wage and hour labor law documentation
Employers subject to the FLSA are required to make, keep, and preserve carefully documentation related to their employee’s wages, hours, and other conditions and practices of employment. The FLSA requires no particular method for maintaining records, but does require that they contain certain information about the employee and data about the hours worked and the wages earned.
Audit your wage and hour and overtime policies and practices with the Employment Practices Self-Audit Workbook
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HR Tools for Overtime
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