by Jessica Flora
Overtime pay is required for non-exempt employees for hours worked in excess of 40 hours in a workweek. The key words here are “hours worked”.
Under the Fair Labor Standards Act, employers are not required to pay overtime on hours not actually worked, such as vacations, holidays, sick time, or any other time that is not worked. Even though employers are not required to count this time when calculating overtime, some employers chose to as a benefit to the employee.
The Survey Says
According to AAIM Employers’ Association’s 2015-2016 Policies and Benefits Survey of 150 St. Louis and Central Illinois businesses, 47% of organizations include holidays in computing weekly overtime pay. Furthermore, 37% of organizations include vacation time in computing weekly overtime pay.
Issues to Consider
Create a policy: Creating a clearly defined policy will leave no room for interpretation. After the policy is created, communicate the policy to the employees and answer any questions.
Consistency: Enforce the policy consistently across the organization. This starts with training front-line supervisors on the organization’s policy and the regulations under the Fair Labor Standards Act. This will help ensure time sheets are recorded and approved accurately. n
Jessica Flora, PHR (solutions.team@aaimea.org) is on the Research and Solutions Team for AAIM Employers’ Association, which helps Missouri and Illinois companies manage their people and processes.
Submitted 8 years 124 days ago