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The Fair Labor Standards Act requires all nonexempt employees to be paid one and one-half times their regular pay rate for any overtime hours worked. Don’t fall for these common misconceptions about the regulation of overtime pay:
Employees waiving their right to overtime pay. An employee may not waive his right to overtime pay. Even if you tell an employee only to work 40 hours per week, any hours actually worked over 40 hours will be subject to overtime pay.
Averaging the hours worked over two weeks. Even though the employer uses a two-week pay period, the FLSA treats each workweek as a single unit. If an employee works 42 hours in one week, the employee must be paid the two hours of overtime, even if the employee only works 20 hours in the subsequent week.
Giving compensatory time instead of cash. The FLSA is biased in favor of cash compensation rather than comp time. Private-sector employers are not permitted to offer employees time off in lieu of overtime payment.
Misclassification by treating all salaried employees as exempt. Being a salaried employee is not sufficient to classify an employee as exempt. Additionally, neither job title nor job description is sufficient. Employers must be careful to ensure that employees are properly classified. Exempt employees must meet a certain minimum salary and fall under a certain exemption category specified by the FLSA.
Delaying payment of overtime. Overtime must be paid as soon as practicable. For most employers, this means on the regular payday following when the overtime is worked.
For more information, visit the Labor Dept. Web site at: http://www.dol.gov/dol/topic/wages/overtimepay.htm
Senior Executive Counsel
NFIB Small Business Legal Center
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