Overtime Pay: What Is It and Who Is Eligible?
Do Exceptions Exist to How Overtime Pay Is Handled?
You've probably heard the term overtime, but you may not understand how you end up getting overtime pay, which is time and a half. Time and a half means that if your regular pay is $10 an hour when you work overtime, you receive $15 an hour. Here's what you need to know about overtime.
Who is eligible for overtime?
Under the Fair Labor Standards Act (FLSA), employees are divided into two groups: Exempt and nonexempt employees. Exempt employees are salaried and do not receive any overtime pay, regardless of how many hours they work. To receive this classification, these employees' job responsibilities must meet strict standards, including management or professional work.
All other employees are classified as nonexempt which means that they are subject to the Fair Labor Standards Act and are eligible for overtime pay. Overtime pay begins when an employee works more than 40 hours in one work, and more than 8 hours in one day in some states (Alaska, California, and Nevada) or 12 hours in Colorado.
In all but these four states, overtime is calculated only on a weekly basis. So, an employee who works 10 hours on Monday and seven hours a day for the next four days is not considered to have worked overtime for purposes of pay in states that keep the 40 hours standard.
Additionally, what is considered a work week may be defined by the employer as any consecutive seven days, with each day consisting of a 24 hour time period. While most businesses operate on a calendar week, if a business wants to run Wednesday to Tuesday for their pay period, they can.
Can you waive your right to overtime pay?
The answer to this question is no. Let's take an extreme example. You work all day on a spreadsheet and neglect to save your work as you go along. At 4:30, a power outage occurs and you lose all of your work. This is clearly your fault and your boss is furious with you for not saving the spreadsheet.
The meeting is tomorrow morning at 8:00 a.m. In order to finish the document, you'll have to stay at least five hours late, putting your time at 45 hours for the week. Your company is still required to pay you overtime for those five hours, even though the reason for the overtime is 100% your fault. They can certainly fire you, but not until they've paid you.
What about comp time?
In the above scenario, one other option exists and that's comp time. If you stay five hours late on Thursday to finish the project, your boss can give you comp time in lieu of overtime as long as he does it in the same work week. So, if you only work three hours on Friday, and your total hours don't go over 40, that is a possible solution to avoid the overtime payment.
What is not possible is that you work 45 hours in one work week and only 35 hours in the next to avoid overtime payment. That is illegal for private businesses. It doesn't matter if the employee consents to this.
Nonexempt employees cannot work for free either. They must be paid for all hours worked, regardless of whose idea it was.
Are there any exceptions?
According to the Department of Labor (DOL), some exceptions to these overtime rules apply, under special circumstances, to police and firefighters and to employees of hospitals and nursing homes. If these jobs exist in your workplace, you will want to check further about overtime with the DOL.
All states are subject to the federal minimums, but your state may be more restrictive. If you're making decisions for your business, double check with your employment attorney. You don't want to accidentally violate the FLSA regulations.
Susan Heathfield makes every effort to offer accurate, common-sense, ethical Human Resources management, employer, and workplace advice both on this website, and linked to from this website, but she is not an attorney, and the content on the site, while authoritative, is not guaranteed for accuracy and legality, and is not to be construed as legal advice.
The site has a world-wide audience and employment laws and regulations vary from state to state and country to country, so the site cannot be definitive on all of them for your workplace. When in doubt, always seek legal counsel or assistance from State, Federal, or International governmental resources, to make certain your legal interpretation and decisions are correct. The information on this site is for guidance, ideas, and assistance only.