AI2HR

Understanding FLSA Overtime Rules: How HR Can Prepare

AI

May 26, 2024By AI2HR

Understanding FLSA Overtime Rules

The Fair Labor Standards Act (FLSA) sets the standards for overtime pay. It is crucial for HR professionals to understand these rules to ensure compliance and avoid penalties. This blog will guide you through the basics of FLSA overtime rules and how HR can prepare.

What is FLSA Overtime?

FLSA overtime rules require employers to pay eligible employees one and a half times their regular rate for hours worked over 40 in a workweek. Not all employees are eligible for overtime pay. Understanding who qualifies is the first step in compliance.

business meeting

Employees are classified as either exempt or non-exempt based on their job duties and salary. Exempt employees are not eligible for overtime pay. Non-exempt employees are. HR must correctly classify employees to avoid legal issues.

To determine if an employee is exempt, consider the following criteria:

  • Salary level and basis
  • Job duties

Calculating Overtime Pay

Calculating overtime pay involves determining the regular rate of pay. This includes basic pay and other forms of compensation like bonuses. HR must ensure that all forms of compensation are included in the regular rate calculation.

calculator desk

p>

Key records to maintain include:

  1. Employee information
  2. Hours worked each day and week
  3. Total daily or weekly earnings

Training and Communication

HR should train managers and employees on FLSA overtime rules. Clear communication helps prevent misunderstandings and ensures everyone knows their responsibilities. Regular training sessions can keep everyone updated on any changes in the law.

training session

>Regular Audits and Reviews

Conducting regular audits of your payroll practices can help ensure compliance with FLSA overtime rules. HR should review employee classifications, timekeeping records, and payroll calculations regularly. This proactive approach can help identify and correct issues before they become problems.

Understanding and complying with FLSA overtime rules is essential for HR professionals. By following these guidelines, HR can help ensure their organization is compliant and avoid costly penalties.