The Department of Labor's Wage and Hour Division requires all covered employers to comply with the Fair Labor Standards Act. Covered employers must pay nonexempt employees one and a-half times the employee's regular pay rate for any time worked in excess of 40 hour. Employers must pay an employee at least federal minimum wage. The FLSA applies to most employers who generate annual sales of over $500,000.
Definition of FLSA Overtime
The FLSA defines "overtime" as actual time an employee works beyond a normal work period. The FLSA defines a "work period" as a consecutive seven-day period in a week. The FLSA requires employers to pay non-exempt employees for time worked beyond 40-hours weekly. However, some employers may use different definitions of "overtime" to define it. As long as the covered employer pays employees for overtime beyond the 40-hour weekly requirement, then the employer may use different definitions. For example, employers may define overtime pay as pay for work in excess of an eight-hour workday. Employers may also pay overtime for work that does not exceed the 40-hour FLSA definition but choose to pay overtime for any hours under the 40-hour threshold. Some commonly exempted employees are commissioned sales workers, commercial drivers and seasonal laborers.
FLSA Overtime Pay Requirement
The FLSA requires covered employers to pay eligible employees for overtime pay of time and a-half of the regular pay the employee receives. If the employee is an hourly employee, then the overtime pay is generally easier to compute than an employee who receives compensation based upon a weekly pay amount. This method requires dividing the number of hours by the total pay in a pay period to compute regular pay rates and overtime pay rates. The FLSA requires employers to pay these salaried employees for overtime pay.
Definition of FLSA Work Time
The FLSA requires employers to pay overtime pay for periods exceeding the 40-hour weekly threshold for any activities employees perform that is work-related. Generally, work-related activities are activities that benefit the employer. Employers who allow the employee to do the work even if the employer never actually knew the employee was performing work have a duty to provide overtime pay if the employer could have easily learned of the employee's extra activities. All time that the employee must remain on the employer's premises is considered work time. These periods include break periods and lunch periods if the employee must remain on-site and is not relieved of mandatory work duties. Time not counted includes leave time and vacation days or FMLA family leave time.
Training and "Off the Clock" FLSA Requirements
If the employer knows or should have known an employee was performing work outside of his normal shifts, then the employer must pay overtime pay for work performed off the clock. Training time is also included in overtime if the employer requires the training or if the training occurs during the employee's shift. Training does not count toward overtime if it is purely voluntary with no pressure to attend and if the training does not relate to the employee's job. Training time that strictly enhances the employee's own skill set and is not mandated or expected does not have paid.
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Since laws may frequently change, you should not use this information as a substitute for legal employment advice. Seek advice through an attorney licensed to practice law in your jurisdiction.