Overtime Pay Requirements
of the FLSA
This
fact sheet provides
general information
concerning the application
of the overtime pay
provisions of the FLSA.
Characteristics
An
employer who requires
or permits an employee
to work overtime is
generally required to
pay the employee premium
pay for such overtime
work.
Requirements
Unless
specifically exempted,
employees covered by
the Act must receive
overtime pay for hours
worked in excess of
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, as such. 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.
The
regular rate of pay
cannot be less than
the minimum wage. The
regular rate includes
all remuneration for
employment except certain
payments excluded by
the Act itself. Payments
which are not part of
the regular rate include
pay for expenses incurred
on the employer's behalf,
premium payments for
overtime work or the
true premiums paid for
work on Saturdays, Sundays,
and holidays, discretionary
bonuses, gifts and payments
in the nature of gifts
on special occasions,
and payments for occasional
periods when no work
is performed due to
vacation, holidays,
or illness. Earnings
may be determined on
a piece-rate, salary,
commission, or some
other basis, but in
all such cases the overtime
pay due must be computed
on the basis of the
average hourly rate
derived from such earnings.
This is calculated by
dividing the total pay
for employment (except
for the noted statutory
exclusions) in any workweek
by the total number
of hours actually worked.
Where
an employee in a single
workweek works at two
or more different types
of work for which different
straight-time rates
have been established,
the regular rate for
that week is the weighted
average of such rates.
That is, the earnings
from all such rates
are added together and
this total is then divided
by the total number
of hours worked at all
jobs. Where
non-cash payments are
made to employees in
the form of goods or
facilities, the reasonable
cost to the employer
or fair value of such
goods or facilities
must be included in
the regular rate.
Typical Problems
Fixed
Sum for Varying Amounts
of Overtime: A lump
sum paid for work performed
during overtime hours
without regard to the
number of overtime hours
worked does not qualify
as an overtime premium
even though the amount
of money paid is equal
to or greater than the
sum owed on a per-hour
basis. For example,
no part of a flat sum
of $90 to employees
who work overtime on
Sunday will qualify
as an overtime premium,
even though the employees'
straight-time rate is
$6.00 an hour and the
employees always work
less than 10 hours on
Sunday. Similarly, where
an agreement provides
for 6 hours pay at $9.00
an hour regardless of
the time actually spent
for work on a job performed
during overtime hours,
the entire $54.00 must
be included in determining
the employees' regular
rate.
Salary
for Workweek Exceeding
40 Hours: A fixed salary
for a regular workweek
longer than 40 hours
does not discharge FLSA
statutory obligations.
For example, an employee
may be hired to work
a 45 hour workweek for
a weekly salary of $300.
In this instance the
regular rate is obtained
by dividing the $300
straight-time salary
by 45 hours, resulting
in a regular rate of
$6.67. The employee
is then due additional
overtime computed by
multiplying the 5 overtime
hours by one-half the
regular rate of pay
($3.335 x 5 = $16.68). Overtime
Pay May Not Be Waived:
The overtime requirement
may not be waived by
agreement between the
employer and employees.
An agreement that only
8 hours a day or only
40 hours a week will
be counted as working
time also fails the
test of FLSA compliance.
An announcement by the
employer that no overtime
work will be permitted,
or that overtime work
will not be paid for
unless authorized in
advance, also will not
impair the employee's
right to compensation
for compensable overtime
hours that are worked.
Where to Obtain Additional Information
This
publication is for general
information and is not
to be considered in
the same light as official
statements of position
contained in the regulations.
Copies of Wage and Hour
publications may be
obtained by contacting
the nearest office of
the Wage and Hour Division
listed in most telephone
directories under U.
S. Government, Department
of Labor or by calling
our toll free number
1-866-4USWAGE.
Source:
http://www.dol.gov/esa/regs/compliance/whd/whdfs23.htm
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