Sometimes businesses engage their employees to work overtime to increase their productivity. Although they can hire new employees, it’s better to offer overtime to existing employees during economic instability. So businesses prefer to pay overtime than hiring, training, and staffing new employees.
More importantly, if any labor laws dispute occurs, the law goes in favor of employees. Here you will learn about the essential factors of overtime.
Things to Know About Overtime Compensation
Many times employers face overtime issues due to lack of awareness. The main reason behind this is because the rules and regulations vary from state to state. The federal laws are not applicable to every state. Thus, as an employer, here is what you need to know about overtime compensation.
1. Who is Eligible for Overtime?
A non-exempt employee who works more than 40 hours a week is eligible for overtime compensation. You must pay for the extra hours they work for the week. There are some limited exceptions which you can find in the L&I’s official website. Employers can set the work hours per week according to their requirements, but that must be specified to the employees beforehand.
2. Can an Employer Require the Employees for Overtime?
Yes, an employer can require an employee to work overtime. In case an employee denies to work overtime, the employer can treat it as an indiscipline act. Further, as an employer, you can require employees to work on the scheduled day off. And there are no such rules for providing certain days off for the overtime.
However, you need to make sure that employees also have family and personal lives, and they also need some time to recharge themselves. The best business practice is to notify them about the overtime policies of your business in advance. Advance notice can help the employees to cope up with the work schedule, and they can work voluntarily without any issues.
3. Compensatory Time off Instead of Overtime Pay
It can be confusing whether you can offer compensatory time off instead of overtime pay. The federal laws don’t allow every employer for compensatory time off in lieu of overtime pay except government workers. In comparison, Washington’s laws allow it on the request of employees. Sometimes employees want compensatory time off, but that is against the Fair Labor Standard Act.
4. The Effect of Holidays on Overtime
Many employers wonder how holidays (for example, Sunday) can affect overtime pay. Well, an employer cannot require employees to work overtime for any time the employees get paid previously for holidays or vacations, etc.
If employees work on holidays, then the employer should pay time for the extra hours (more than 40 hours a week) that the employee worked. Sometimes the employer has to pay double time for work on holidays.
5. Rules of Unauthorized Overtime
Finally, if an employee works for unauthorized overtime, then the employer has to pay for the extra hours. It doesn’t matter when the employees work, whether it may be after the working hours of a regular day or at the weekend. Regardless of the timing, if employees have to work on an unauthorized schedule, they must be paid.
6. Overtime Cost of Employers
As an employer, you need to have a policy requiring prior authorization for overtime. However, if an employee works overtime without authorization, it’s the job of the employer to inform the employee about the authorization and pay for the working hours.
Conclusion
Hopefully, the above information has helped you to understand about overtime compensation. The rules and regulations may change from state to state. You need to aware of the special laws applicable in your state and take the necessary steps to pay your employees with
