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HR MATTERS E-TIPS
THIS WEEK’S E-TIP: Holiday Pay and Overtime Calculations Q&A
Published by Personnel Policy Service, Inc.
"Your Policy and Compliance Experts Since 1972"
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THIS WEEK’S E-TIP: Holiday Pay and Overtime Calculations Q&A
Monday is Labor Day, and is treated as a paid holiday for most
employees. But, if you have an employee who works on Labor Day as
well as the rest of the week, will you owe him overtime? |
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THIS WEEK’S E-TIP: Holiday Pay and Overtime Calculations Q&A
Q: If a nonexempt employee works a full 40-hour workweek and
also takes a day of paid holiday, vacation, or sick leave, is the
employee
entitled to overtime pay?
A: Not unless the employee actually works more than 40
hours
in the workweek. According to the Fair Labor Standards Act (FLSA),
nonexempt employees must be paid overtime at time and one-half their
regular rate of pay for all hours actually worked over 40 in a
single
workweek. ("Nonexempt" refers to all employees covered by the
minimum wage and overtime requirements of the FLSA, i.e. those who
are not exempt from it.)
Thus, in calculating actual working hours for a nonexempt employee,
you
do not have to count any paid time off in the overtime calculation
if the
employee did not perform any work during that period. (Download
free
Holidays model policy .)
So, if a nonexempt employee works a full 40-hour workweek and also
takes a day of paid holiday, vacation, or sick leave, the employee
is
entitled to overtime pay only if he in fact works more than 40 hours
in the
workweek. (Note, however, that a limited number of states, such as
Rhode Island, require payment of at least time and one-half for
employees who work on certain holidays.) |
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Consider the following example. A nonexempt employee normally
works
Monday through Friday, eight hours a day. She receives a paid
holiday
and does not work on Monday. She then works Tuesday through
Friday,
eight hours a day, and is asked to work eight additional hours
on
Saturday. Her pay would be for a total of 48 straight-time hours
(40 hours
worked and 8 hours holiday). Since she actually worked only 40
hours,
overtime pay is not required. (Download
free Holidays model policy).
As an aside, if you voluntarily pay a premium of time and
one-half (the
equivalent of overtime) for work on a holiday, weekend, or
evening, you
should be able to credit the extra premium compensation towards
any
overtime actually earned in the same week. |
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Subscribers to the
Personnel Policy Manual (print/online) and HR Policy Answers on
CD can find information on calculating overtime pay in a week a
nonexempt employee has taken paid time off in Holidays, Chapter 503,
note 14.
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chapters,
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