Employers and employees need to have a clear understanding of their wages and salary, along with any benefits. Some employees are typically not provided overtime pay. Salaried employees often do not receive overtime pay and instead receive their usual pay regardless of the number of hours they work. There are some exceptions to this rule. Those who meet specific salary levels may be exempt from the law and are, therefore, eligible for overtime pay.
Salary Exemption Test
Some salaried employees are eligible for overtime pay. The rules provide for a salary exemption that, when met, allows a salaried employee to be paid overtime. The rule provides that salaried employees making less than $684 per week are eligible for overtime pay. This means that an employee making less than the set amount will automatically be eligible to get paid overtime when they work more than 40 hours in a week.
What is Overtime Pay?
Employees are generally paid an hourly rate or a salary wage for each period of time they work. Wage employees and some salaried employees must receive overtime pay when they work more than 40 hours in a work week. A workweek may change from industry to industry, but it is typically a consecutive seven-day period during which an employee works. Depending on the industry, a workweek may be any fixed and regularly recurring period of 168 hours.
Overtime pay is also called time and a half because it is a payment of 1.5 times the employee’s regular wages. It is helpful to know that if an employee does not work part of the week due to illness or vacation, this does not count towards the work week. It is important to know that overtime pay is not required when an employee works more than 8 hours in one day. Instead, the total hours for the week are used to determine whether overtime pay applies.
Fair Labor Standards Act
Employers should have a basic understanding of the Fair Labor Standards Act (FLSA). The FLSA is legislation that governs employee payments and establishes minimum wages. The laws ensure that employees are paid fairly in accordance with the current regulations. States may enact their own legislation but must always be in compliance with the minimums established by the FLSA. Changes are often made to the FLSA to accommodate new or updated federal minimum wage standards as well as other details.
Employers must understand the current employment laws and apply them to their employees. An employer may have salaried and wage employees as well as salaried employees who are exempt from overtime restrictions. You must know how the laws apply to each of your employees and must provide them with the proper pay based on the legislation that is in place. To find out more, contact us at Moen Sheehan Meyer, Ltd. at (608) 784-8310 or online for a consultation.