Understanding Overtime: Federal Laws and Employee Classifications
Overtime tracking is crucial for compliance with labor laws and employee satisfaction. Under the Fair Labor Standards Act (FLSA), non-exempt employees are entitled to overtime pay for hours worked over 40 in a workweek, calculated at one and a half times their regular pay rate. A workweek is defined as a fixed, recurring period of 168 hours. Non-exempt employees must receive at least $684 per week to be classified as exempt from overtime.
Accurate record-keeping is essential, as the FLSA requires employers to maintain detailed records of work hours and wages for up to three years. This includes time cards, pay rates, and overtime earnings. Employers must understand whether their employees are exempt or non-exempt, as this classification directly impacts overtime entitlement and compliance with FLSA provisions.