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Overtime




Full Interview transcript

Carl: Hello business owners this is Carl Kleimann with another Business Survival Tip from Odyssey OneSource. If you require or even permit a non-exempt, non-managerial employee to work overtime, you are generally required to pay the employee premium pay for such overtime work. Unless specifically exempted, employees covered by the Fair Labor Standards Act must receive overtime pay for hours worked in excess of 40 in a workweek. Overtime pay must be at a rate of not less than time and one-half of their regular pay.

The Fair Labor Standards Act does not require overtime pay for work on weekends or holidays and never requires double pay. Overtime must be calculated on a workweek basis, which must be a fixed and regularly recurring period of 168 hours – seven consecutive 24 hour periods. Averaging of hours over two or more workweeks is not permitted and overtime earned in a particular workweek must be paid on the regular payday for that workweek.

The regular rate of pay cannot be less than the minimum wage and must include all remuneration including the reasonable cost to the employer of any non-cash payments in the form of goods or facilities. Discretionary bonuses, vacation and sick pay are not considered part of the employee's regular rate.

When an employee, in a single workweek, performs two or more different types of work for which different straight-time rates apply, the regular rate for that week is the weighted average of such rates. Be aware that the requirement to pay overtime may not be waived by agreement between the employer and employee. And making an announcement that overtime work will not be paid for unless approved, in advance, will get you nowhere. If they perform the work, pay them and then discipline them for not following company policy.

I am Carl Kleimann and this has been another Business Survival Tip by Odyssey OneSource, ranked as the number one Professional Employer Organization two years running by the Black Book of Outsourcing.

For more information on this and other issues affecting employers, please visit odysseyonesource.com.


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