Who Gets Overtime Pay?
Find out whether you should be paid for overtime work.
Page 1 of 3
Over the years I’ve seen a lot of confusion in the workplace about who’s entitled to receive overtime pay and who isn’t. It can be a pretty confusing topic, but in this article I’ll try to clear up any questions that you may have about overtime.
What is Overtime Pay?
The rules for overtime pay are part of the Fair Labor Standards Act or FLSA. It’s a federal law that’s enforced by the Wage and Hour Division of the U.S. Department of Labor. Overtime pay is compensation for certain employees who work more than 40 hours in a given work week. It must be paid at a minimum of one and one-half times the worker’s normal rate of pay for any hours that exceed 40.
For example, let’s say you qualify for overtime pay, earn $20 per hour, and work 42 hours in a week. Your minimum overtime rate would be $30 an hour for the two hours that you worked over 40. (That’s $20 times 1.5). So your weekly pay would total $860—$800 for your regular pay plus $60 for your overtime pay.
There are two ways to qualify for overtime. One has to do with requirements concerning your employer and the other has to do with the type of work you do. Let’s talk about the employer requirements first.
Which Employers Must Pay Overtime?
All employers with at least two employees must pay overtime wages to qualified workers—unless the business earns less than $500,000 in annual revenue. But there are some exceptions to that rule. If a business or organization earns less than $500,000, they still have to pay overtime if they’re a(n):
Institution that cares for residents who are sick, disabled, or mentally ill
Enterprise that has employees who perform work involved in interstate commerce