Calculating Overtime: Maintaining FLSA Compliance
Managing Overtime to Maintain FLSA Compliance
According to the FLSA, non-exempt employees must be paid overtime pay at no less than one and one-half times the employee’s regular rate of pay for hours worked in excess of 40 in a workweek.
The regular rate is the average hourly rate calculated by dividing the total pay for employment (except the statutory exclusions) in any workweek by the total number of hours actually worked. A workweek is a fixed and regularly recurring period of 168 hours, or seven consecutive 24-hour periods, and it may begin on any day of the week and at any hour of the day.
Certain industries are subject to different ways of calculating overtime. For example, special rules apply to employees of hospitals and residential care establishments. The “Eight and Eighty” (8 and 80) Overtime System allows those employers to use a fixed work period of 14 consecutive days instead of the 40-hour workweek to calculate overtime. (Employers must have a prior agreement or understanding with employees before work is performed.) To learn more about overtime in health care, visit FLSA Overtime Calculator Advisor.
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