FLSA and Overtime

The Fair Labor and Standards Act, often referred to as the FLSA, regulates wage and hour matters. It establishes minimum wage, overtime pay, record keeping and child labor standards.

Without going overboard with the what, the who, the how, let's start with the basics of "when" overtime is paid. Nonexempt hourly employees must be paid time and a half (150% of their normal pay rate) when they work more than 40 hours in any work week.

Oftentimes companies require employees to have approval prior to working overtime. And yes, this is an acceptable policy. The trap that many employers often fall into is refusing to pay overtime to an employee who worked the overtime without prior approval. Remember, under FLSA the employer must pay for all hours "suffered or permitted" to work. The FLSA does not distinguish between approved and unapproved overtime.

You may experience compensable job-related activities during an employees "off the clock" time such as the employee taking home work, working through lunch, job related phone calls at home, etc. Does the hourly employee have access to email outside of the regular work day (through work computer, laptop, home computer, cell phone, PDA, etc.)? If so, you must record any and all time spent reading and/or responding to company business email and/or performing work with the aid of such equipment. If hourly employees are provided with PDAs and are expected to check them outside of work hours, then the time spent checking the PDA is compensable time!

There are other areas that may require compensation or overtime. For example:

1. Rest breaks under 20 minutes.
2. Down time or on-call time that prevents the employee from carrying out personal business.
3. Preparation before shift or clean-up after shift.
4. Mandatory classes, meetings or conventions.
5. Travel time other than normal commuting.

As an employer you are allowed to discipline, or terminate, an employee for violating an overtime approval policy. Ensure your overtime policy is clear and communicated to employees.