The following is not meant to be legal advice and is provided for information purposes.
Here is an outline on federal laws relating to overtime and compensatory time:
I. Overtime (OT) Pay
A. Due to non-exempt employees.
B. Calculated at time and ½ employee’s regular rate (RR).
1. RR = rate per hour = Total earnings for all hours worked in workweek/Total hours worked
a. Does not include:
(1) Gifts
(2) Payments for time not worked (e.g. holiday, vacation)
(3) Profit sharing plans
(4) Discretionary bonuses
(5) Stock options
(6) Premium payments
C. Required for each hour worked in workweek in excess of maximum allowed (usually 40 hours/week).
D. Workweeks may not be averaged.
II. Compensatory (Comp) Time Off Instead of Overtime Pay
A. Private employers: May not use comp time for OT.
B. Public employers: May offer comp time if:
1. Provided at 1 and ½ hours off for each hour of OT worked.
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