Under rules laid out by the Fair Labor Standards Act (FLSA), a federal statute that is under the oversight of the federal DOL, nonexempt employees “must receive overtime pay for hours worked over 40 in a workweek at a rate not less than time and one-half their regular rates of pay.”
That reads like a clear cut guideline, but its application isn’t nearly as simple.
It requires determination of which employees are non-exempt and which employees are exempt.
As an example, the “duties” test designates a variety of administrative, executive and professional job duties that “can” exempt employees from overtime eligibility.
A company can be held liable for overtime pay even if supervisors did not pre-authorize the overtime, but knew that the tasks at hand would require additional work hours to complete.
Introducing a policy requiring supervisor signatures to approve overtime is one method a company can use to control mandatory overtime expenses.
Beginning Dec. 1, 2016, new legislation increases the salary threshold for exemption from $23,660 annually to $47,476 annually.
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