Unless specifically exempt, employees must receive overtime pay for hours worked in excess of 40 in a workweek at a rate not less than 1 1/2 their regular pay rate. There is no limit on the number of hours employees aged 16 and older any work in a workweek. You are not required to include as hours worked the paid time off (holidays, vacation days). Do not substitute paid non-work hours (holidays and paid vacation) for actually worked hours in order to make all hours straight time, thus avoiding overtime pay.
Example: Jane works 12 hours a day, 4 days of the workweek (12*4=48 hours/week). She is off the 5th day, a holiday, but is paid for 8 hours. She is correctly paid 40 Hours straight time + 8 Hours Holiday (non-work) + 8 Hours Overtime. Jane's employer is not allowed to substitute the 8 hours holiday pay for Jane's 8 Hours of Overtime to avoid paying the overtime rate.
The regular rate of pay cannot be less than the minimum wage. The regular rate includes all remuneration for employment except certain payments like: pay for expenses incurred on the employer's behalf, premium payments for overtime work, or premium paid for work on Saturdays, Sundays, and holidays; discretionary bonuses, gifts and payments in the nature of gifts on special occasions, and payment for occasional periods when no work is performed due to vacation, holidays, or illness.
When an employee in a single workweek works at two or more different types of work for which different straight-time rates have been established, the regular rate for that week is the weighted average of such rates.
Fixed Sum for Varying Amounts of Overtime: A lump sum paid for work performed during overtime hours regardless to the number of overtime hours worked does not qualify as an overtime premium even though the amount of money paid is equal to or greater than the sum owed on a per-hour basis. For example, no part of a flat sum of $180 to employees who work overtime on Sunday will qualify as an overtime premium, even though the employees' straight-time rate is $12.00/hour and the employees always work less than 10 hours on Sunday. Similarly, where an agreement provides for 6 hours pay at $13.00/hour regardless of the time actually spent for work on a job performed during overtime hours, the entire $78.00 must be included in determining the employees' regular rate.
Salary for Workweek Exceeding 40 Hours: A fixed salary for a regular workweek longer than 40 hours does not discharge FLSA statutory obligations. For example, an employee may be hired to work a 45 hour workweek for a weekly salary of $405. In this instance the regular rate is obtained by dividing the $405 straight-time salary by 45 hours, resulting in a regular rate of $9.00. The employee is then due additional overtime computed by multiplying the 5 overtime hours by one-half the regular rate of pay ($4.50 x 5 = $22.50).
Overtime Pay May Not Be Waived: The overtime requirement may not be waived by agreement between the employer and employees. An agreement that only 8 hours a day or only 40 hours a week will be counted as working time also fails the test of FLSA compliance. An announcement by the employer that no overtime work will be permitted, or that overtime work will not be paid for unless authorized in advance, also will not impair the employee's right to compensation for compensate overtime hours that are worked.