At one time or another, your employees are going to work more than 40 hours a week. Projects run longer than expected, things that can’t be pushed to the next day need to be done. As an employer your job is to pay your employees on time and accurately and since overtime can be tricky, here’s an overview of what you need to know.
I think the most important question to cover is if employers have to pay out overtime to their employees. The simple answer is yes; all non-exempt employees are entitled to get paid for their overtime and not paying them could result in big consequences like lawsuits, investigations from the Department of Labor, and fines.
There are a few common mistakes that lead to inaccurate calculations in overtime. Here are a few:
- Inaccurate time keeping – it’s important to have legitimate and correct time tracking for your employees. This protects you from fraudulent claims.
- Misclassifying employees – Make sure you know what employees qualify as exempt and non-exempt.
- Off the clock work – Paying employees for all their worked time is imperative and expected.
One of the first things to take a look at is whether your employee qualifies as exempt or not. An employee that is exempt does not need to be paid overtime, but it’s the employer’s responsibility to decide this. There are certain job roles that do qualify as exempt. Here’s a breakdown:
Executive – manages a fraction or the entirety of the business
Professional – broken into “learned” and “creative” categories but must use their advanced knowledge in the field of science in their role
Administrative – office work that directly affects business operations
Computer – Work in analytics, software engineer, or computer programmer
Outside Sales – sales outside of the business location
Note: Exempt employees must also receive a salary of $684 or more per week. If they don't meet this requirement, they would be considered non-exempt, regardless of their role.
For a deeper dive into overtime, including how to calculate it and requirements, check out our article in the Resource Center:
Overtime pay and federal overtime laws. This will help you better understand overtime and set you up for success in your business!
