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    0 Replies Latest reply on Jan 27, 2010 6:50 PM by Timesheet

    Overtime: The Fed Calls the Shots Here

    Timesheet Wayfarer
      We get calls all the time from customers who want help setting up the
      overtime rules inside our time tracking software. They explain that
      they would like to customize the defaults to suit their own company's
      policies. Our software at
      adds up all the hours your employees work and includes the overtime
      too, because when an employee works overtime they should be paid using
      a simple formula. Nevertheless, I have heard a gamut of creative
      solutions for calculating overtime. While having secondary or even
      tertiary pay rates is great employee incentive, employers must
      understand that there are federal laws governing overtime pay. Overtime
      policies cannot be tailored from company to company.

      The rules
      are actually quite simple. Overtime is calculated as one and a half
      times the regular pay rate for all hours and fractions of an hour
      worked over 40 in one week. In California overtime is also added to any
      hours worked over 8 in one day.

      Here are the most common overtime misconceptions:


      Unless you live in California, you don't have to pay overtime to an employee that worked a shift longer than 8 hours.
      You cannot average hours over a two week pay period. In most cases this will eliminate or diminish the overtime. Overtime is calculated weekly. There is no exception.
      If you routinely deduct a full time employee's lunch, but they are too busy to take the full lunch, they need to be compensated for the extra time that they work.
      Having your employees agree to customized overtime policies does not trump the federal labor laws.
      Overtime hours must be paid on the regular payday for which the overtime was worked, and not on some paycheck down the road.
      Under most circumstances, an employee cannot be paid overtime in comp time. It must be paid in money. The exceptions include some government employees.


      Employees in certain kinds of positions are exempt from overtime rules which can be found here on the Department of Labor website.