OT is OK!

Understanding your responsibilities in overtime payment

With the economy being such a challenge, employers are being forced to do a lot more with fewer employees. What does that mean? Overtime, baby!

Surprisingly, most employees don’t mind working overtime. It’s a great way to make some a little extra money, which is something we can all use right now. But in order to make sure they continue those extra hours with extra smiles, it’s important that they be paid according to the Federal and the State regulations.

The U.S. Department of Labor has what is called the Fair Labor Standards Act (FLSA), which states that hourly employees who work more than 40 hours per workweek must be paid at a rate of 1.5 times their normal rate when they’re working those late Thursday nights trying to fill a massive order. While it would be tempting to just include those extra hours at the regular rate on their next paycheck, it’s your legal obligation as an employer to compensate them with the greater overtime amount.

Now, obviously, not every employee at every job is subject to the FLSA’s overtime requirements. Salaried employees who receive a flat-rate aren’t entitled to overtime pay, and any extra compensation for working nights and weekends isn’t required to be paid. A few specific industries are also not mandated to issue overtime. All of the specifics of overtime eligible or not, salaried or hourly (exempt or non-exempt) can get pretty complex and it’s actually pretty surprising to use that many business owners don’t know their stuff on this subject.  So, it’s a good idea to check out the Department of Labor’s website to find out the details regarding your specific business.

One thing to note when considering overtime, though, is the massive price that comes with not paying up. Employers who don’t comply with the FLSA can be criminally prosecuted, required to pay back overtime and fined - considerably! With those kinds of penalties, it’s pretty clear that paying the overtime is not only a legal requirement, but more than worth it.

But even if you weren’t risking a massive fine and legal consequences, there’s a ton of good reasons to treat your employees fairly and squarely when they’re going the extra mile for you.  We all want our employees to stay positive and motivated - and if your humans are being treated fairly and properly compensated, they’ll be so much more willing to put in the extra effort to ensure the productivity and overall excellence of your business. And that’s a benefit that’s priceless.

So, if you’re like most employers today and are looking to maximize productivity with minimal staff, be sure to learn the rules that come with extended hours. Go the extra mile for your employees and they’ll go the extra mile for you. And, as always, if you have any questions regarding overtime pay and the federal laws surrounding compensation, contact hr-haven today at 855.474.2836! We’re always happy to help and look forward to helping you color inside the lines!