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Paying Overtime: What Employers Need to Know

The importance of employers knowing the rules surrounding how much to pay employees cannot be overstated. When it comes to paying the correct amount of wages for time worked, errors can lead to costly lawsuits, damaging a company’s reputation as well as emptying its coffers. For those establishing a new business in Florida, or who are already in business but are concerned about compliance, a consultation with qualified employment law attorney is strongly advised. In the interim, the following is a brief overview of a common source of confusion, proper classification of employees according to their exemption status.

Exemption status and overtime

The Fair Labor Standards Act (FLSA) establishes wage and hour laws at the federal level. This includes how to define an exempt versus a non-exempt employee.

A non-exempt employee refers to any worker entitled to payment for overtime under the FLSA. This pay is calculated as one-and-a-half times the employee’s regular rate of pay and must be paid when he or she works more than the standard 40 hours per week. While this directive seems straightforward, many employers conflict with the law by incorrectly calculating how much overtime is actually due or by misclassifying non-exempt employees as exempt.

An exempt employee falls under one of the literally dozens of categories for this status defined by the FLSA, and is not entitled to overtime. The most common exemptions are for white-collar roles, such as the following:

  • Administrative personnel
  • Executives
  • IT professionals
  • Outside sales force

The burden of proof that an employee is exempt falls on the employer, which makes it vital for a business owner to understand who rightly fits the category. In addition, state laws may complicate classification, based on the age of an employee and other issues. The best way to ensure proper compliance – and avoid an employee taking legal action – is to contact business employment attorney Peter Mavrick proactively for help deciphering all applicable federal and state overtime laws.

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