Both federal and state laws mandate employers to pay their employees overtime which is typically a premium of 50% of their usual wage. This means that when an employee works overtime, he or she should be paid what’s called “time and a half” for every overtime hour that has been worked.
There are a number of exceptions to these laws; therefore, not all employees will be entitled to time and a half. Those who are not eligible for overtime are called “exempt employees”, and those who can receive it are considered to be “non-exempt employees”.
What is Considered to be Overtime
In general, any employee who works over 40 hours in one workweek will be entitled to overtime pay. This is regardless of how many hours they work in a day.
Example: John works as an EMT 12 hours, 4 days a week for a total of 48 hours. He will receive 8 hours of overtime pay.
Some states, such as California, also have a daily overtime rate to which means any employee that works more than 8 hours in a single day will be entitled to overtime pay. Using the same example above, John would be entitled to receive 4 hours of daily overtime pay for everyday he worked 12 hours.
Employers that Should pay Overtime
Most employers will be required to pay overtime. If you’re unsure whether or not you are exempt from this rule, the first thing to do is determine whether or not you are covered by the Federal Fair Labor Standards Act. This act covers the federal wages and lays out the rules for overtime. Businesses who have over $500,000 are typically covered by the FLSA. If you are a smaller business, you may be required to pay overtime when you conduct business between two or more states. Known as interstate commerce, this is considered to be anything that involves phone calls, emails, mail, or goods that may come and go to another state. If by chance your business is so small that it is not included in the above, your state may have overtime laws that still require you to pay your employees overtime.
Employees that May and May Not Be Eligible Overtime
When your business is covered by the Fair Labor Standards Act or your state’s laws regarding overtime, all of your employees will generally be entitled to receive overtime pay. The exceptions to this rule include the following types of employees who may not be eligible for overtime pay:
- Independent contractors
- Professional, executive, or administrative employees who are on a salary
- Volunteer workers
- Outside salespeople
- Select computer specialists
- Seasonal workers
- Religious conference center workers
- Certain newspaper employees
- Certain fishing employees
- Small farm employees
- Certain switchboard operators
- Casual babysitters and caretakers
- Criminal investigators
There are many exceptions and rules to the above overtime exemptions. Before you assume that you do or do not have to pay your employees overtime, it is highly recommended to talk with an experienced business lawyer abingdon, VA relies on who can explain to you the rules and laws that are applicable to your unique situation.
Thank you to our friends and contributors at The Law Offices of Mark T. Hurt for their knowledge about business law.