Does Your Employee Handbook Properly Cover Overtime Pay?

Employers are required to pay workers a minimum wage set by law for all hours worked. If an employee is non-exempt, they must be paid suitable overtime pay right for any additional time worked. Overtime pay may seem like a simple topic, but it can get more complex when applying it in real-life situations.

Initially, you must determine whether your employees are exempt, which means they are not entitled to receive overtime pay for extra hours worked. Examples of employees exempt from receiving overtime pay include:

  • White Collar. The term “white collar” has been used to describe certain professionals that are exempt from overtime pay. To qualify for the white collar exemption, an employee’s job responsibilities must meet certain conditions and they must receive a minimum weekly salary, as dictated by law.
  • Executives. Managers who supervise the work of a minimum of two other full-time employees fall within the executive exemption. An executive employee typically has the power to hire and fire other employees.
  • Administrators. If the employee’s primary job is to perform office work, the administrative exemption applies. This type of employee’s job relates to the supervision, management or operation of the company. An administrator often has decision-making authority on behalf of the business.
  • Professionals. A professional exemption applies if the employee has obtained an advanced degree or has acquired specialized knowledge by attending extended schooling.
  • Outside sales. Employees whose main job involves making sales calls which require the employee to routinely be away from the employer’s place of business may be exempt from receiving overtime pay.

The above list is not exhaustive and there may be other exemptions that apply, so employers should consult with an experienced employment attorney to verify that the appropriate exemptions are being applied and that your business is in compliance with the laws governing overtime payment.

If you need assistance creating or updating your employee handbook to deal with overtime pay or any other employment law matter, contact Leslie S. Marell for help. We serve as general counsel to clients who do not require, or choose not to employ, a full-time lawyer in-house. Call today to schedule your initial consultation.