What Is Overtime? Almost everyone has heard of the phrase “working overtime.” That saying is frequently spoken and, while people might have a general answer to the question what is overtime, others may not be aware that the topic is subject to specific federal labor and employment regulations.
The Legal Definition Of Overtime
Overtime refers to additional working hours that qualified employees at a given company or organization must be compensated for.
Typically, rules establishing specific aspects of overtime are not arbitrarily created from one employer to another. The subject is governed by federal legislation known as the Fair Labor Standards Act (FLSA).
This government-sponsored mandate established that the average work week be eight hours per day and a total of 40 hours per week. Any employee that tenders labor for an entity governed by the FLSA could be eligible to overtime pay if said individual exceeds more than 40 hours worked in a week. In some states, overtime might also be tendered to employees who worked more than eight hours in a given day.
Entities That Are Required To Pay Overtime
There might be certain companies, businesses or organizations that are exempt from the overtime regulations set forth in the FLSA. However, the general rule is that any entity that has at least $500,000 in annual sales in subject to the mandates established in the legislation. Furthermore, some states might have their own overtime laws that could apply to entities that do not meet the preceding FLSA regulations.
Are All Employees Entitled To Overtime Pay?
The simple answer to this question is no. There are certain types of workers who are considered exempt from overtime eligibility. The most common group of exempted employees fit into the category of executive, administrative or professional workers who are paid a salary. Typically, salaried employees are those that earn at least $455 per week and are paid the same amount each pay cycle.
Aside from title, executive, administrative and professional employees to be exempted from overtime pay must perform specific job duties.
An executive employee must supervise at least two or more persons, be bestowed the responsibility of hiring and relieving employees of their duty and executing decisions pertinent to the entity’s operations. Administrative workers are required to execute non-manual labor attributable to the entity in question’s day-to-day operations. Professional staffers are considered employees who possess advanced knowledge of a specific field of study and apply said knowledge to perform a specific function within the entity in question.
There are several other categories of employees considered exempt from overtime privileges. Said categories include independent contractors, specialized computer employees earning a specific amount per hour, outside salespersons, seasonal employees, individuals employed at entities that operate seven months per year or fewer, babysitters, specific nautical employees and certain farm workers.
How Is Overtime Calculated?
Employees who have exceeded 40 hours in a given week or meet any other eligibility requirements an additional 50 percent of their hourly rate or time-and-half for services rendered. Calculations are not made merely by establishing an hourly rate but will also include additional payments such as commissions and bonuses.