Overtime Regulations

Definition:

The laws that regulate how to compensate employees for working in excess of a standard workweek

Excluding certain industry-specific exceptions, federal and state law requires that the nonexempt employees be paid when they work overtime. Nonexempt employees must be paid one-and-a-half times their normal rate of pay for hours worked in excess of 40 hours during a workweek. A workweek is defined as seven consecutive 24-hour periods. Although a workweek can begin on any day, it must be fixed for that employee and can’t be changed so as to evade applicable overtime laws.

Most states have their own overtime laws, and if they’re more favorable to employees, those are the ones you must follow. For example, under California law, employees who work more than eight hours during a single day are entitled to overtime, even if they don’t work more than 40 hours during a given workweek (the federal requirement).

Remember, nonexempt employees can be salaried as well as hourly. So don’t make the mistake of assuming that just because an employee is salaried, he or she is exempt from overtime.

Related Content

Product Development

The overall process of strategy, organization, concept generation, product and marketing plan creation and evaluation, and commercialization of a new product

Exit Interview

The formal conversation that takes place between an employee and an HR or other manager to determine the reason(s) the employee is leaving

Primary Market Research

Iinformation that comes directly from the source--that is, potential customers. You can compile this information yourself or hire someone else to gather it for you via surveys, focus groups and other methods.

Credit Policy

Guidelines that spell out how to decide which customers are sold on open account, the exact payment terms, the limits set on outstanding balances and how to deal with delinquent accounts

Mergers

The combination of one or more corporations, LLCs, or other business entities into a single business entity; the joining of two or more companies to achieve greater efficiencies of scale and productivity

Subchapter S Corporation

A special form of corporation that allows the protection of limited liability but direct flow-through of profits and losses