Time, as they say, is money, and so when your employees start working more hours than usual you may start wondering how they’ll want to be compensated.
The Fair Labor Standards Act (FLSA) was a piece of legislation passed in 1937 to give greater rights to workers, and this included the first nationally-applicable overtime laws. They stipulate that there are two ways to be compensated for extra time worked: through banked hours vs overtime pay.
But how to compare banked hours vs overtime pay, and how to figure out which method works better for your company at any given time? The experts here at actiTIME will explain the rules below, as well as describe some state-specific legislation that may impact that choice. Read on for more!
The most common way that most workers react to working extra hours is asking for overtime pay. According to the FLSA, overtime hours are counted as any time worked over 40 hours in a workweek (a consecutive set of 7 days, set down beforehand as part of your contract with employees). This usually isn’t dependent on how many hours a day are worked, though your state may have additional rules regarding that, and any extra hours are paid out at 1.5x the regular rate of pay.
So if a worker makes $15 an hour and works 44 hours a week, their weekly pay stub (before taxes) will look like this:
