When do you pay overtime?

When does overtime (OT) start?  40 hours in a week or 8 hours in a day?  Federal law states that an employer usually must pay time-and-a-half (1.5) after 40 hours in a week.  There are a few exceptions to this rule for certain industries (like farm laborers) and certain positions (exempt, salaried employees). 

State Laws: In addition to Federal law, some individual states have more stringent OT laws.  Some set OT at anything more than 8 hours in a day, others at 10 hours.  Some set daily time limits for particular industries (like manufacturing or medical).  It is best to check with your individual state’s labor office for details.  The Federal Department of Labor (DOL) posts a convenient state contact list: Department of Labor.  In addition, please remember that states also regulate how many hours a minor is even allowed to work.

Paying OT: Overtime Pay should be paid at the same intervals as regular pay.  It is best to have a written policy stating your OT rules in your company’s employee handbook. 

Time for an updated Employee Handbook?  Consider having an Employee Handbook custom designed for your company.  New Wind Business Solutions will do the work for you, and you will receive an updated handbook explaining all of your company’s policies, including overtime:
http://www.go2newwind.com/employee-handbooks.html

What about employees working in another state?  You should follow the OT laws of the state where an employee is located (especially if that state is more stringent), even if your corporate office is in another state.  If your employees travel from state-to-state, you will probably want to talk with a labor law attorney about the specifics.  You want to avoid paying overtime when not required, but you also want to make sure that your practices do not violate any state’s labor laws.

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