The Fair Labor Standards Act (FLSA) requires employers to pay non-exempt employees overtime (at 1.5 times their regular rate of pay) whenever they work more than 40 hours in a workweek. Some states require overtime pay in additional circumstances and at different rates.
For example, California requires employers to pay non-exempt employees 1.5 times their regular rate of pay for all hours worked over eight in a workday and 40 in a workweek as well as for the first eight hours of work performed on the seventh consecutive work day in a workweek (double time is required for hours worked over eight on the seventh consecutive day). Double time is also required for hours worked over 12 in a workday.
Test Your Knowledge:
Overtime violations are a common source of FLSA penalties, which can result in back pay, fines, and damages. Below, we present several common scenarios to test your knowledge of overtime requirements. Choose the answer you think is right and then click to see the correct answer and explanation.
Q: In workweek one, a non-exempt employee works 30 hours. In workweek two, he works 50 hours. Is the employee owed overtime pay under federal law?
- It depends on whether the payroll period is weekly or biweekly.
- Yes, the employee is entitled to 10 hours of overtime pay.
- No, the employer can average the two workweeks to avoid overtime.
B. Yes, the employee is entitled to 10 hours of overtime pay. If an employee works more than 40 hours in any workweek, he or she is entitled to overtime. You cannot average two or more workweeks to determine whether overtime is due.
Q: When determining an employee's regular rate of pay for overtime purposes, which of the following must be included?
- Hourly wages
- Nondiscretionary bonuses
- Shift differentials
- All of the above
D. All of the above. An employee's "regular rate of pay" includes their hourly rate plus the value of nondiscretionary bonuses, shift differentials, and certain other forms of compensation. However, there are certain types of compensation that are excluded from the regular rate of pay, such as premium pay for overtime worked, certain gifts, and payments for occasional periods when no work is performed, such as vacation or illness. Some states may have additional exclusions from the regular rate of pay, so check your state law for guidance.
Q: A non-exempt employee is employed by the same employer in two jobs, one as a receptionist at $10 per hour and the other as a client services representative (CSR) at $12 per hour. In one workweek, the employee works 10 hours as a receptionist and 40 hours as a CSR. For the purposes of calculating overtime under the FLSA, what is the employee's regular rate of pay?
- Trick question—the employee isn't entitled to overtime because you don't need to add the hours from the two jobs.
- $11.00 (the average of the two wages)
- $11.60 (the weighted average of the two wages)
- $12.00
C. $11.60 (the weighted average of the two wages). Under the FLSA, when an employee, in a single workweek, works two different jobs at different rates of pay for the same employer, the regular rate of pay for that workweek is the weighted average of the two. To calculate the weighted average, take total straight-time pay and divide it by the total hours worked as follows:
($10 hourly rate x 10 hours) + ($12 hourly rate X 40 hours) = $580
$580 straight-time pay divided by 50 hours worked = $11.60
Your state law may have different rules for when there are two or more rates of pay.
Q: An employer has a written policy that prohibits employees from working overtime without prior authorization. An employee works one hour of unauthorized overtime. Is the employee entitled to overtime pay?
- Yes.
- No.
A. Yes. If a non-exempt employee has worked overtime, he or she must be paid overtime, regardless of whether the overtime was pre-authorized. A policy that no overtime work is permitted unless authorized in advance doesn't relieve the employer of this requirement. An employer may subject the employee to disciplinary measures for working unauthorized overtime, but in no case may they withhold overtime pay.
Q: An employee typically works eight hours per day, five days per week, but during one workweek the employee worked 10 hours per day on Monday through Thursday (for a total of 40 hours). On Friday, the employee took a paid vacation day. Under federal law, is the employee entitled to overtime pay for the workweek?
- Yes, the employee's vacation hours count toward their total hours for the week for federal overtime purposes.
- No, unless the employer promised otherwise.
B. No, unless the employer promised otherwise. Paid time off doesn't count towards hours worked when determining whether overtime is due, unless the employer has promised otherwise. Keep in mind that some states, including California, require daily overtime for hours worked over a certain number in a workday.
Q: An employee has a schedule of 8:30 AM to 5 PM, Monday through Friday, with a half hour unpaid lunch each day. During one workweek, the employee worked her normal schedule but chose to work through lunch on two days. Is overtime pay required under federal law?
- Yes, the employee has worked 41 hours as a result of missing two meal periods.
- No.
A. Yes, the employee has worked 41 hours as a result of missing two meal periods. In general, bona fide meal periods may be unpaid and don't count as hours worked when determining whether overtime is due. Under the FLSA, an unpaid bona fide meal period must generally be at least 30 minutes without interruption, and the employee must be fully relieved of all duties for the purpose of eating a regular meal. If the meal period doesn't meet these requirements, it must generally be considered hours worked.
California: In California, for each workday that the meal period is not provided, the employee is generally entitled to one additional hour of pay at their regular rate of pay. This penalty wouldn't generally apply if the employee chooses to work through a meal period voluntarily. Additionally, the state has a limited exception for "on-duty" meal periods if: (1) the nature of the work prevents an employee from being relieved of all duty; (2) the employer and employee agree in writing to an on-the-job paid meal; and (3) the agreement clearly states that the employee may revoke it at any time.
Q: An employee has already worked 40 hours in a workweek, but she hasn't finished a project that is due. The employee stays an extra hour to finish it, but tells her supervisor that she doesn't need to be paid overtime since she missed the deadline. Is overtime pay required?
- Yes.
- No, the employee voluntarily waived her right to overtime.
- No, as long the employer gets the employee's waiver in writing.
A. Yes. Under the FLSA, non-exempt employees are entitled to overtime whenever they work more than 40 hours in a workweek. Employees cannot waive this right even if they were to do so voluntarily.
Q: An employee is a highly skilled mechanic and is paid a salary of $700 per week. In one workweek, he works more than 40 hours. Is overtime pay required?
- Yes, the employee doesn't meet the FLSA's overtime exemption criteria.
- No. The employee is paid a salary of more than $455 per week, so he is automatically exempt from overtime.
A. Yes, the employee doesn't meet the FLSA's overtime exemption criteria. The FLSA's overtime exemptions do not apply to manual laborers or employees who perform work involving repetitive operations with their hands, physical skill, and energy. Employees performing this type of work must be classified as non-exempt and paid overtime whenever they work more than 40 hours in a workweek (and any additional circumstances required under state law).
Conclusion:
Wading through federal, state, and local overtime laws can be tricky. Make sure you carefully review all requirements applicable to your business before making overtime calculations.