When business is booming, it’s definitely a cause for celebration. As things start to get busier, asking your employees to pick up some extra hours is a common practice. You may be planning on rewarding your staff with a company-wide bonus, but if you intend to do this in lieu of overtime pay, you need to think again.
Overtime pay is strictly regulated by the Federal Fair Labor Standards Act (FLSA). While the rules in some states vary, the state of Florida adheres to all of the guidelines outlined in the FLSA. Here’s what you need to know to keep yourself out of trouble.
Provisions of the Fair Labor Standards Act
The overtime rules outlined in the FLSA are enforced by the U.S. Department of Labor. They clearly state that all employees who are covered by the act must be paid an additional wage for every hour of overtime worked. Overtime is defined as anything over 40 hours in a standard work week.
Definition of a Work Week
The work week doesn’t have to be a calendar week. It can consist of any 7 consecutive 24-hour periods. It can also vary between different employees or category of employee and can start on any day or at any time. The key is that the period must remain consistent from week to week.
Overtime Pay Requirements
Federal law dictates that every hour worked over the 40-hours must be paid at a rate of one and a half times the regular pay rate. Hours worked on weekends or holidays don’t require overtime pay unless they put the employee over the 40-hour threshold.
In most cases, overtime must be paid on the regular payday for the week in which the overtime hours were worked. This is one of the many reasons giving a bonus that doesn’t coincide with actual hours worked won’t suffice.
Failure to Meet Overtime Requirements
Not only does failing to meet overtime requirements often leave you with disgruntled employees, it can put you at risk for a lawsuit, criminal prosecution, and stiff fines. Employers found to have willfully violated overtime laws can be subject to up to $10,000 in fines. A second willful violation may result in jail time.
Some Final Thoughts
As an employer in Florida, it’s best not to take any chances when it comes to overtime pay. Instead, carefully track employees’ hours worked and be sure you pay them appropriately. If you have questions about overtime rules and your compliance requirements, review the FLSA reference guide or contact the U.S. Department of Labor’s Wage and Hour Division.