The Fair Labor Standards Act (FLSA) is administered by the Wage and Hour Division (WHD) of the United States Department of Labor. The Act establishes standards for minimum wages, overtime pay, recordkeeping, and child labor. Today we’re going to discuss the overtime rules that are in effect for employees who fall under this act’s provisions.
The FLSA does not limit either the number of hours in a day or the number of days in a week that an employer may require an employee to work, as long as the employee is at least 16 years old, nor does it limit the number of hours of overtime that may be scheduled. However, the Act requires employers to pay covered employees not less than one and one‑half times their regular rate of pay for all hours worked in excess of 40 in a workweek, unless the employees are otherwise exempt.
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.
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 in any workweek (except exclusions) by the total number of hours actually worked. 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.
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.
There are some classes of workers who are exempt from overtime rules. For more information on the federal requirements, see http://www.dol.gov/compliance/guide/minwage.htm or http://www.dol.gov/whd/regs/compliance/whdfs23.pdf.
Keep in mind many states have stricter guidelines than the Fair Labor Standards Act. To find rules that apply in your state, see http://www.dol.gov/whd/minwage/america.htm#.UPGlmW9EHi0. Since many of or client’s employees are in California, we’ll discuss the labor laws of California in the next post.
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