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Are You Making These Employee Overtime Mistakes?

Overtime calculations

Work-life balance can be a touchy subject for both employers and employees alike. Many businesses might see employees regularly putting in long hours and late nights to make sure their tasks are being completed. Sometimes, this may be at the request of the employer, while other times it may be due to the employee wanting to put in the extra time to meet a deadline or put the finishing touches on a project.


Exempt Versus Non-Exempt Employees

Depending on whether the employee is classified as an exempt or non-exempt employee, these extra hours could entitle the employee to overtime pay. Exempt and non-exempt are terms used to refer to jobs that are governed by the Fair Labor Standards Act, or FLSA, and exclusions from FLSA coverage are determined by several criteria, including rates of pay and job duties.

Employees who are in positions considered exempt from FLSA coverage are not required to be paid for overtime work. These employees are typically guaranteed a set base salary for any work period in which they perform any work (less certain allowable deductions).

Non-exempt employees, on the other hand, are protected by the FLSA requirements which state that employees must be paid at least the federal minimum wage for all hours worked. The FLSA also requires overtime pay to be calculated at no less than one and a half times the employee’s regular rate of pay for time worked over 40 hours in a work week. Non-exempt employees putting in extra hours are legally required to be paid overtime pay if it puts them over 40 hours worked in a designated work week, even if those extra hours were not scheduled or authorized.


What If My State Has Different Rules for Overtime?

While the FLSA provides some minimum standards and basic guidance, it’s important for businesses to know that there may be other regulatory requirements for specific states and municipalities. As a general rule, employers should follow the requirement that is most beneficial to the employee. This could mean employees may be entitled to overtime pay and sometimes double pay, even if they wouldn’t normally receive any overtime at all under FLSA guidelines.


How Can I Reduce Overtime?

Excessive and unanticipated overtime can really hurt the budget and could be indicative of other issues within the company. When employees regularly feel the need to work extra hours to get their job done, they can feel burnt out and experience decreased productivity. In some cases, the extra hours being recorded may be due to errors in data entry where time is being manually recorded. Paper timesheets are notoriously inefficient and error-laden – not to mention how easily they can be manipulated by disgruntled or dishonest employees.

Taking advantage of technology for timekeeping is a great way to easily track hours and cut down on errors due to manual processes. Many systems also have reporting capabilities that could assist in identifying patterns and help address underlying issues that may be leading to burnout and inefficiency. Valor Payroll Solutions can save you time and money while reducing data-entry errors through the use of our online timekeeping solution that can seamlessly integrate with the payroll process. Contact us today!

Christina Hageny

Christina Hageny

President - Valor Payroll Solutions

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