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Tag: overtime calculations

5 Ways to Mess Up Overtime Calculations

confused about overtime calculations

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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Calculate Overtime After 40 Hours and Not After 80

calcuate overtime after 40 hours in a workweekI have heard this question asked countless times over the years:

“Why does your time tracking system only calculate overtime after 40 hours and not after 80 hours?”

The answer is, because that is how it’s defined in the FLSA. Many business owners don’t realize this but they must calculate overtime after 40 hours and within one workweek, not after 80 hours within two. In other words, it’s not our design, it’s the law for most cases in the US.