Calculating FLSA Overtime Pay for Non-exempt Employees—Doing it Correctly to Avoid Costly Fines and Penalties

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Calculating Overtime pay for non-exempt employees under FLSA needs to be done correctly in order to avoid costly penalties and fines. AudioSolutionz is conducting a session on April 7, 2015 which helps you understand the process of effectively calculating overtime under FLSA.

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Overtime is quite a simple idea. If you have to work more, it is fair that you get paid more. ~ President Barrack Obama

The Fair Labor Standards Act (FLSA) expects employers to pay overtime to nonexempt employees at the rate of 11/2 times their regular pay rate for every hour worked exceeding the 40 hour mandated work time in a workweek. However, the FLSA does not required that exempt employees be paid overtime for hours worked in excess of 8 hours daily or on weekends and holidays.*

Employers have been burdened with several FLSA overtime claims recently and it is ever more important that they get familiar with the reasons that invite a claim and take steps to prevent that from happening.

Common reasons that invite FLSA overtime claims:**

  •     Employees being mistakenly treated as ‘exempt’ by their employers from FLSA overtime requirements
  •     Failure of employers to record, compensate or identify employees who have performed job-related/compensable activities in ‘off-the clock’ hours.
  •     Failure of employers to include employees who don’t have ‘wage augments’ in their overtime rate calculation (e.g. longevity pay). Here are few important points that should be noted while calculating overtime:

‘Overtime’ vs. ‘FLSA Overtime’

Overtime under FLSA means the amount of time worked beyond a prescribed period. According to FLSA, normal work period is a work week, i.e. 7 consecutive days and 40 hours per week in total. Thus, time worked over and above 40 hours per week is to be calculated under FLSA (N.B: some jobs use the term ‘overtime’ in a different way). The employer is free to pay their employees according to their wish, but it should not be lesser than the minimum wage requirements as mandated by FLSA. So, nothing happens till the nonexempt employee has worked more than 40 hours within a work week. All time worked over and above is to be taken into consideration and the first step in calculating overtime is to ascertain the actual period of time an employee has worked in the work week.

Working ‘Off the clock’

A number of lawsuits involve employers who have failed to include the time spent by employees who perform work activities over and above their prescribed shifts. Some employees come early and start working. Those work hours are also to be counted under hours worked, provided the employer had knowledge about this case. Things such as ‘pre-shift roll calls’, ‘setting up equipment before work’, ‘staying late after work hours to finish work’, all come under work time. Even when employees take work home, that may be calculated under hours worked.

On-the-job Training

Most of the training time comes under work time. If the training time comes under the regular work shift of the employee, or is required by the employer – it is to be calculated as work time. Training time need not be counted under work time, if:

  •     It occurs outside the normal work schedule of employee
  •     Is voluntary without any pressure
  •     Not directly related to the current job profile of the employee
  •     Employee does not work during the training

Various Problems in Calculating Overtime Under FLSA***

The following are the problem areas in calculating overtime under FLSA.

  •     Deriving a Fixed Sum for Varying Duration of Overtime: If the employee is already paid in lump sum for the work performed overtime, it is not calculated as overtime premium even if the paid amount is equal to or more than sum owned on per-hour basis.
  •     Workweek Salary Exceeding 40 hours: The FLSA statutory obligations aren’t discharged even if there is fixed salary for a regular workweek that exceeds 40 hours
  •     Overtime Pay May Not be Waived: Overtime requirements cannot be waived even with mutual discussion or an agreement between employers and employees.

In light of recent FLSA regulations and litigations, AudioSolutionz, the country’s leading industry information provider is conducting a Live Audio Conference on Tuesday, April 7, 2015 where expert speaker Vicki M. Lambert, CPP will provide an effective way in which employers can compute overtime pay under FLSA for their non exempt employees. The session will provide tips to calculate overtime correctly so that costly fines and penalties are avoided.

For more information, visit

About AudioSolutionz

AudioSolutionz is the country’s leading provider of industry information, knowledge and training on various trending industry topics, since more than a decade. With its panel of industry veterans and experts, AudioSolutionz provide participants with much needed information, advice and training directly from the speakers. The unique Q&A sessions at the end of every session is a perfect opportunity for industry professionals to get their queries solved directly from the experts. The organization provides conferences, webinars, DVDs and transcripts on more than 12 industries across the US.

*** (Revised: July 2008)

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Shivane Kay
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