I’ve been addressing questions about this topic FOREVER. There appears to be quite a bit of confusion over who and when employees are eligible for overtime pay.
Wage and overtime rules (Federal & State) are crucial to businesses. Unfortunately, being unaware of the rules can cost you a bundle. In most states, the magic number is 40 hours in a week. Simply put, an employee is entitled to one and a half times his/her normal hourly pay for time worked above and beyond 40 hours.
Mistakes made by employers tend to fall into one of these myths:
Myth 1: SALARIED EMPLOYEES DO NOT RECEIVE OVERTIME.
The Fair Labor Standards Act, which regulates wage and hour laws, categorizes employees as follows: Exempt employees do NOT earn overtime. Non-exempt employees can be paid a salary, daily rate, or an hourly rate. “Salaried” is not a category for overtime purposes. If your employee works more than 40 hours they are entitled to overtime at all times.
Myth 2: EMPLOYEES WITHOUT APPROVAL OF OVERTIME DO NOT HAVE TO BE PAID FOR IT.
Regardless of whether or not the work was permitted, you must pay when overtime work has been performed. Clearly communicate the rules of your company regarding the “approval” procedures for overtime.
Myth 3: NO OVERTIME ON TIME SHEETS? DON’T HAVE TO PAY THEM, RIGHT?
Unfortunately, the burden is on the employer to prove that employees were paid properly. Relying strictly on time sheets may not help you if you are investigated by the DOL (Department of Labor).
You need to verify with your employee that his/her time sheet is correct and includes overtime hours worked.
Myth 4: EMPLOYEES CAN CHOOSE TIME OFF RATHER THAN OVERTIME PAY.
At this time, comp time in lieu of overtime pay is NOT allowed in the private sector.
When in doubt, pay it, and don’t believe anyone who thinks they have a great solution for getting out of overtime without verifying their information first. Rumor has it the government doesn’t make it easy to get out of EVER.