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Tag: overtime calculations

Overtime Rules Are Changing January 1st, 2020. Are You Ready?

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If you are a non exempt employee or you have non exempt employees in the US, times are about to change! Since 2004, overtime threshold rules have stayed the same. This means that the cost of living threshold increased and the requirements for overtime did as well. The Obama administration took up the issue and directed changes to overtime laws that would have expanded the number of eligible workers. However, the Trump Administration prevented those changes. Nearly 3 years later, the rules are finally slated to change, but severely watered down from the previous plan.

On Sept. 24th, 2019 the US Department of Labor (DOL) announced their final overtime rules that will affect many Americans. In fact, the new overtime rule will make overtime pay available to over 1.3 million workers and will provide an estimated $298.8 million in additional pay. The new overtime rules will become effective officially on Jan 1st, 2020. Here’s what you need to know:

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Business Math: Calculating the Regular Rate for Overtime

 

Many businesses have employees that get paid multiple pay rates during their shift. This happens when they perform more than one specific job function. For those employees, the hourly rate depends on the job they are working on at the time. Hourly rates by job can vary when employees work in the construction, plumbing, caretaking, landscaping, and many other industries. When you have an employee that works under different rates, you need to make sure that you are calculating their regular pay rate properly for overtime. Unless your employee is specifically exempted, employees working at more than one job rate covered by the FLSA must receive overtime pay at their regular rate and not at the specific rate for the job they are doing when overtime is incurred.

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5 Ways to Mess Up Overtime Calculations

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Employers can make a lot of mistakes with overtime calculations if they’re not careful and this is bad because it can lead to lawsuits. Some employers make some of these mistakes intentionally too and basically test their luck with labor lawsuits.

Some of those mistakes include: avoiding overtime payments by classifying employees incorrectly as contractors, paying employees a salary when they should be working by the hour, “paying” private employees comp-time in lieu of overtime, etc.

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