How to Pay Employees for Overtime

How familiar are you with the Fair Labor Standards Act (FLSA)? If you thought that overtime constituted straight pay for non-exempt (hourly) employees who work over 40 hours a week, then it's time you brushed up on the overtime rules.

Many think the FLSA only applies to anyone who earns minimum wage, but in reality, it applies to anyone working in a business engaged in interstate commerce--which is virtually any small business in today's marketplace.

In the "over-40 hours" scenario, the Act requires employers to pay non-exempt personnel wages totalling at least one and one-half times the regular rate for any work done in one workweek with over 40 hours worked in that week.

The law becomes gray when employees perform both clerical and technical duties, and mistakes in reporting and paying overtime can be expensive; penalities could add up to more than $10,000 per day.

Employers should consult with human resource professionals to make sure they understand the law and its interpretation. Paying hourly employees what they're due is much less expensive than a daily fine.

You may like these other stories...

We've probably all worked for soul-sucking managers who expect employees to spend their workdays tethered to the office with no other life obligations or desires. But that's not what the "When Work Works"...
A recent study of lateral hiring trends in the accounting industry by the Chicago-based executive search practice the Koltin Consulting Group (KCG) has found that in the first half of 2014 firms continue to lure top talent...
Without getting into all that's been written about the jobless recovery and record high corporate profits without the accompanying hiring, there has indeed been a fundamental shift in how corporate America is working...

Already a member? log in here.

Upcoming CPE Webinars

Oct 23Amber Setter will show the value of leadership assessments as tools for individual and organizational leadership development initiatives.
Oct 30Many Excel users have a love-hate relationship with workbook links.
Nov 5Join CPA thought leader and peer reviewer Rob Cameron and learn ways to improve the outcome of your peer reviews while maximizing the value of your engagement workflow.
Nov 12This webcast presents basic principles of revenue recognition, including new ASU 2014-09 for the contract method. Also, CPAs in industries who want a refresher on revenue accounting standards will benefit.