Sep 15, 2023

Is This Your Situation: You're Confused About Overtime

Not everyone in your office will qualify for overtime pay, but how do you determine employee classification? Read through to learn more about overtime and who qualifies.

 

In most circumstances, employers must pay overtime to nonexempt employees who work more than 40 hours a week. (In some states, overtime is more than 8 hours a day.) But not everyone qualifies for overtime pay. In most cases, the line is drawn between hourly and salaried employees, and misclassifying your staff can be a problem in the long term. So how do you know which category your team falls into and whether or not you should provide overtime pay?  Here is a basic introduction to the classifications and how they might apply to your company.

  • Overtime rates. There are two primary categories of overtime: "time and a half" and "double time," which is often referred to as holiday pay. Time and a half is calculated at 50 percent over the employee's hourly salary. So if an employee makes $10 an hour and works overtime hours, those additional hours would be paid at $15. Double time is the law only in California. Some companies may choose to pay double time as an incentive if an employee works on a holiday. There may be union rules as well.
  • Salary versus hourly. For most people, work classifications are divided between hourly and salaried employees. Hourly employees are paid by the hour. If they work more than the 40-hour-a-week maximum, they earn time and a half. A salaried employee receives an annual amount that is divided up per paycheck throughout the year.
  • Exempt versus nonexempt. The real categories are "exempt" and "nonexempt." These classifications come directly from the Fair Labor Standards Act (FLSA), which regulates overtime and minimum wage pay. According to the FLSA, the biggest population of exempt workers are classified as "white collar," which includes administrative, executive, computer or outside sales professionals. If you are uncertain about the classification of your employees, check with the FLSA to learn more.

Are you classifying your employees correctly when it comes to hourly rates and overtime pay? Give us a call and we'll be happy to help you sort through the rules and make sure you're compliant.

©2023


 

MORE RECENT NEWS…


Jul 31, 2025

Lose an Employee but Gain Information

Employers conduct exit interviews with departing employees during the final days of offboarding. If done right, these interviews can be a source of valuable information to help the company improve.


Jul 30, 2025

How To Budget for Salary Increases

One of the most important ways for an employee to feel valued by their company is to receive a salary increase. This also helps with retention! Read through for ideas on deciding how much of a salary increase should be awarded to your employees.


Jul 29, 2025

Is This Your Situation: Protecting Against Employee Theft

Business owners lose about $50 million a year to employee theft and fraud, according to the U.S. Chamber of Commerce. Read through for a glimpse at some of the many ways employees could be stealing from you.


Jul 28, 2025

OBBBA: Learning the Deduction Details

The recently passed law has a lot of complex provisions, which have led to a lot of misinformation! Fortunately, the IRS has just published a guide to many of the new rules. Read through to read about them, so you can discuss them with your tax advisor.


Jul 03, 2025

What To Know About Fringe Benefits and Taxes

When you provide workers with additional benefits on top of their regular pay, some may be taxable. As the rules can get complicated, it pays to familiarize yourself with the requirements. Read through for an overview of which benefits are taxable.


Jul 02, 2025

Working 'Off the Clock': What Employers Need To Know

Disputes over unpaid work time often arise from tasks performed outside official hours — for example, answering emails, traveling between jobsites or changing into work clothes. Employers must understand when these activities count as compensable work. Read through to learn how exempt and nonexempt statuses affect wage obligations.




More News & Press can be found in our Archive.