Who qualifies for overtime? How much should I pay them?
The Fair Labor Standards Act (FLSA) is a federal law that establishes labor standards in the United States. The FLSA ensures fair compensation for workers and defines who is exempt from overtime pay and who is not. It’s critical to review each employee’s status and comply with current employment laws. The FLSA states that non-exempt employees must be paid time and one-half their regular rate of pay for all hours worked over 40 in a seven-day workweek. In accordance with the FLSA, overtime pay must be calculated on a weekly basis—and not over a two-week (or longer) pay period—to allow for more flexible scheduling.
The FLSA also requires employers to pay all overtime hours an employee actually works, even if that overtime is not authorized before it actually takes place. Employers may choose to discipline an employee for working unauthorized overtime, but the overtime hours must be paid.
WHO'S EXEMPT FROM GETTING PAID OVERTIME?
Three key factors must be met for an employee to be exempt from overtime. First, they must be paid a salary for a 40-hour workweek (not hourly pay). Also, the salary must meet or exceed the minimum exemption threshold of $684 per week. Lastly, the employee’s role in the company must primarily be professional, administrative, or executive. All three criteria must be met for the employee to be exempt from overtime eligibility. This means they are not entitled to overtime pay regardless of how many hours they work in a week. These salary requirements do not apply to outside sales employees, teachers, and employees practicing law or medicine.