What do Human Resource Managers Need to Know about Overtime Rules?
When it comes to overtime rules, human resource managers must stay up-to-date on current legislation in order to legally protect their companies and provide fair compensation to employees. The Department of Labor’s (DOL) Wage and Hour Division (WHD) oversees the Fair Labor Standards Act (FLSA).
The Fair Labor Standards Act (FLSA)
The Fair Labor Standards Act (FLSA) of 1938 established a federal minimum wage and rules regarding overtime pay and documentation. The FLSA applies to employees in the private sector and in local, state and federal government agencies. The rate of overtime pay, which is one and one-half times the regular rate of pay, kicks into effect after 40 hours of work are reached in a workweek. There are no limits on the number of hours an employee who is 16 years or older may work in any workweek. Bear in mind that the FLSA doesn’t require employers to pay overtime for work on holidays and weekends unless there is overtime involved. The hours worked only apply to the time employees are required to be on the employer’s property or on duty, but off the property. There are a number of exceptions to the FLSA that apply to workers like sales people, police officers and managers.
What is the Federal Minimum Wage?
In 2009, nonexempt workers were entitled to a minimum wage of $7.25 per hour. However, many states have minimum wage laws that are usually higher than the meager federal standard. Whenever employees are subject to both state and federal minimum wage laws, they are entitled to receive the higher minimum wage. Because Congress has experienced continual gridlock regarding minimum wage regulations, a high number of states have raised their own minimum wages. Around 30 states have set their minimum wage above the federal standard of $7.25 per hour. In fact, over 15 states require that their minimum wages automatically increase with the cost of living. A number of states have also passed resolutions to automatically increase wages in the coming years. Almost 10 states require that the tipped minimum wage, for workers like waiters and porters, must equal the full minimum wage.
What are the Recordkeeping Requirements?
FLSA regulations require employers to maintain accurate records regarding things like wages and hours worked. There are no official rules on how the wage information should be kept, such as standardized forms or time clocks. Employers must record personal information, such as the employee’s name, occupation, home address and birth date. Employers must record the hour and day when workweek begins, the total straight-time earnings and the total hours worked each workday and each workweek. The records must also show wage deductions, the total wages paid each time, the date of payments and the standard pay periods covered. It must also include the total overtime pay for the workweek and the regular hourly rate for the employees. Different types of records are required for exempt and nonexempt workers.
As a final note, there is a new overtime rule that covers over four million workers who previously were not eligible under federal law. Now, workers who do not earn at least $47,476 a year, or $913 a week, must be paid overtime. Maintaining knowledge of overtime rules will help human resource managers maintain compliance.
