Typical problems with FLSA overtime measures
The U.S. Department of Labor and the Fair Labor Standards Act (FLSA) states that employers are required to pay employees extra wages if they work more than 40 hours in a single workweek. Overtime pay is usually one-and-a-half times an employee's regular pay rate.
Some employers avoid paying workers for overtime hours worked because of the added payoll expense. However, businesses that are found in violation of the FLSA could be forced to pay employees back wages and the DOL penalties for noncompliance. In 2008 alone, the Department of Labor recovered $123,686,617 in back wages for 182,964 employees.
These are some common problems the FLSA finds with employers' overtime policies:
1. Paying fixed sums for varying amounts of overtime
Employers are not allowed to pay employees a lump sum to cover overtime employee attendance even if the sum is equal to or greater than the amount workers would otherwise receive.
2. Paying a salary for a workweek that exceeds 40 hours
Even if employees are hired to work a 45 hour workweek and agree to be compensated $405, they must still be paid extra for overtime hours.
3. Agreeing to waive overtime pay
Employers are not freed of their obligations to pay employees overtime even if they make an agreement to waive the premium pay rate.
Employers can avoid expensive violations by regularly auditing their payroll practices.
Some employers avoid paying workers for overtime hours worked because of the added payoll expense. However, businesses that are found in violation of the FLSA could be forced to pay employees back wages and the DOL penalties for noncompliance. In 2008 alone, the Department of Labor recovered $123,686,617 in back wages for 182,964 employees.
These are some common problems the FLSA finds with employers' overtime policies:
1. Paying fixed sums for varying amounts of overtime
Employers are not allowed to pay employees a lump sum to cover overtime employee attendance even if the sum is equal to or greater than the amount workers would otherwise receive.
2. Paying a salary for a workweek that exceeds 40 hours
Even if employees are hired to work a 45 hour workweek and agree to be compensated $405, they must still be paid extra for overtime hours.
3. Agreeing to waive overtime pay
Employers are not freed of their obligations to pay employees overtime even if they make an agreement to waive the premium pay rate.
Employers can avoid expensive violations by regularly auditing their payroll practices.
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