Overtime Compensation

Definition - What does Overtime Compensation mean?

Overtime compensation is the pay for hours worked over the standard 40-hour work week. Under the Fair Labor Standards Act (FLSA), all non-exempt employees must be paid at least the federal minimum wage for all hours worked, and they must also receive overtime compensation for all hours worked that exceed the 40-hour work week.

Justipedia explains Overtime Compensation

Under federal laws, overtime compensation must equal at least one and a half times an employee’s regular rate of pay. All overtime compensation must be paid at the same time as the employee’s regular wage. Overtime pay is not, however, specifically designated for work activities performed on holidays, nights or weekends, unless the hours worked extend past the 40-hour work week.

Employers must follow the minimum provisions outlined under the Fair Labor Standards Act (FLSA). Failure to follow the standards or misclassifying employees is a violation of the act. Employers may, however, increase benefits or pay provided to employees above the minimum standards through written contracts or collective bargaining agreements. Cities or municipalities may also require employers to pay wages that are above the FLSA requirements.

Non-exempt employees who qualify for overtime compensation under the FLSA generally fall under specific categories: blue-collar workers, non-management employees, electricians, plumbers and construction workers, to name a few. Other employees, however—such as certain bona fide executives, administrative and professional employees, outside sales employees and certain computer employees—may be considered exempt from overtime compensation laws.

Employees who are not paid overtime compensation, according to the federal standards under FLSA, may seek redress. The most common violations occur when employers either intentionally or unintentionally misclassify employees as exempt.

Workers who suspect that they have been illegally denied overtime pay can discuss their complaints with their employer, the local labor boards in their state, the Department of Labor (DOL), or talk to an employment lawyer who specializes in labor law.

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