As a respectable business owner, you’d never steal from your employees—but few professionals recognize how easy it can be to “steal” by mistake. For example, if you’re ignorant of your state’s overtime laws, you may be underpaying your workers, leading to wage violations, penalties, and a blow to your reputation.
The US department of labor recovered about $17 million in unpaid wages last year alone. Are you sure you’re up-to-date on state overtime regulations?
We’ve created this guide to help small business owners brush up on state overtime laws. A little extra knowledge is enough to help small business owners avoid major consequences.
Read on to save your reputation and start paying your workers what they deserve for working overtime.
About State Overtime Laws
The Fair Labor Standards Act (FLSA) is a federal overtime law, and nearly all overtime pay falls under this umbrella. In essence, all non-exempt employees must receive 1.5 times their standard compensation rate for every hour over 40 in a single workweek.
The FLSA includes exemptions for certain employees whose pay and duties pass their exemption test. In some cases, state laws may cover employees who don’t meet the above criteria. In others, overtime laws include stricter requirements.
The pay configuration is the most significant difference between federal and some state laws. Federal law always configures overtime by workweek. Some state laws configure overtime pay by workday instead.
As a general rule, if state and federal laws are in opposition, employers must follow the law with the greatest benefit to the employee.
States that configure overtime by workday include:
All other states follow federal employment laws. Laws vary in the four states listed above.
In Alaska, employees must receive overtime if they work more than 40 hours in a week or more than 8 hours in a day. This may not apply to businesses with four or fewer employees.
In California, employees must receive overtime if they work more than 40 hours in a week, more than 8 hours in a day, or more than six days in a single workweek.
In some cases, double-time laws may also apply. Employees who work more than 12 hours in a day or a full, 8-hour shift on the seventh consecutive workday must receive double pay.
In Colorado, employees must receive overtime if they work more than 40 hours a week or more than 12 hours a day. They must also receive overtime for working 12 consecutive hours, even if the shift goes into a second workday.
In Nevada, employees must receive overtime if they work more than 40 hours a week. If they make less than 1.5 times the minimum wage per hour, they must receive overtime for working eight or more hours in a workday.
Other states have additional conditional laws. It’s best to speak to a payroll specialist to avoid accidental wage violations.
Know Your State Overtime Laws
All non-exempt employees can earn overtime, and they deserve to receive the correct rate for their labor. As a business owner, you can save yourself money by following your state overtime laws upfront. More importantly, you can help preserve your reputation as an honest leader and trustworthy brand.
If you need assistance ensuring you’re doing right by your employees, the payroll specialists at Valor Payroll Solutions can help. Our family-oriented team is ready to offer our knowledge, expertise, and Midwestern charm to small business owners in Tulsa and the surrounding region. Reach out today to learn more about our payroll services and start a conversation.