How to Determine Overtime Pay for Non-Exempt Employees
To determine if overtime pay is present the employer must first establish a workweek. The Fair Labor Standards Act (FLSA) says a “workweek” is seven consecutive 24-hour days beginning when the employer chooses.
According to the FLSA, non-exempt employees must be paid at least the minimum wage and receive overtime pay at the rate of one and a half times their regular rate of pay for all hours worked in excess of 40 hours for the workweek. The key word here is “worked”; time spent on vacation, sick leave and holidays will not be counted as time worked. Such time should be paid as straight-time but not included as time worked when computing overtime pay.
The FLSA uses several remedies to enforce compliance. When Wage and Hour investigators find violations they will recommend ways for the employer to become compliant and to require the payment of any back wages owed. Those employers who willfully violate the minimum wage or overtime pay requirements are subject to civil penalties of up to $1,100 per violation.