It’s very fortunate when you have employees who are willing to go the extra mile for your business and work overtime, especially in stressful periods. However, it’s important to make sure that you’re keeping in line with Fair Labor Standards Act overtime regulations and status, especially as these regulations change.
What is the FLSA?
Federal regulations say that employees covered by the FLSA receive overtime pay for any hours worked that place the employee over 40 hours in a week. That rate must be 1.5 times the employees’ regular rate of pay, and it includes employees 16 years and up. While this is straightforward for some industries, it can be confusing when applied to various kinds of jobs.
Tipped employees and FLSA overtime
Depending on the state, tipped employees may get paid under federal minimum wage with the understanding that their tips will make up the difference. This doesn’t mean that they’re exempt from overtime rates, however. If your tipped employee does overtime in any form, you as the employer are still responsible for paying them their minimum wage rate times 1.5 for each hour of overtime they worked.
What employees are overtime exempt?
Certain employees can be exempt from receiving overtime pay. This depends on the aspects of that individual employee’s job, such as their day-to-day duties and their salary. In general, it can fall into a few different areas:
- Creative professional exemption: Anyone who works in a creative role where their primary job function involves being creative.
- Administrative exemption: The employee’s primary job function is performing office or non-manual work directly related to the management of the business.
- Highly compensated employees: These are employees who are providing non-manual work and getting paid over $107,432 per year.
In all of these cases, the employee’s job has to be non-manual, and they have to be making a salary of no less than $684 per week. These employees are generally exempt from overtime pay, but you may want to ask an attorney about the specifics of your employees to be sure.
Consult an attorney
If you have questions about keeping within FLSA status with your specific business, reach out to an attorney who’s knowledgeable in FLSA labor laws. An employment law attorney may help ensure that your business is meeting all its obligations to employees.