Employers must follow state and federal laws when paying employees. The Fair Labor Standards Act (FLSA) is a federal law that defines minimum wage and overtime pay rules and sets child labor standards, among other things. In addition to federal laws, states have their own laws in place that regulate wages and overtime. It is helpful to understand the basics when it comes to paying employees in Wisconsin.
Minimum Wage
Minimum wage is set at both the national and state levels. The Wisconsin minimum wage for non-tipped employees is currently $7.25 per hour, the same as the federal minimum. The minimum wage is the same across the state of Wisconsin and applies to all industries and all sizes of companies. Minimum wage for tipped employees in Wisconsin is $2.33 per hour. It is important to note that an employee’s wages and tips must equal at least minimum wage, $7.25 per hour. If not, the employer is required to pay the difference.
Overtime Pay
There are special requirements for overtime pay. Overtime pay applies to wage workers, also called hourly employees. You must pay an employee overtime pay for any hours over 40 in a week. The overtime pay is 1.5 times the employee’s regular pay per hour. Generally, overtime pay is calculated on a weekly basis rather than a daily basis. In other words, if an employee works overtime one day, you don’t need to pay overtime for that day unless the weekly hours total more than 40.
Overtime pay applies to most industries, including factories, mercantile or mechanical establishments, hotels, restaurants, retail and wholesale stores, beauty parlors, transportation firms, and more. Overtime pay does not apply the same way to employees under the age of 18. Workers who are ages 16 or 17 (minors) must get overtime pay for more than 10 hours worked in one day and more than 40 hours in a week.
Exemption for Overtime Pay
There are a number of exceptions for overtime pay as outlined in Wisconsin legislature DWD 274.04. Establishments that are exempt from overtime pay are private domestic services, federal agencies, and some non-profit organizations. Some types of jobs are exempt from overtime pay. Some of these include executive, administrative, or professional workers, taxi drivers, some hospital workers, some forestry jobs, some sales jobs, and several additional categories. It is also important to note that union employees are typically covered through contracts, and employers must pay wages and overtime based on the contract.
Breaks
State law does not require breaks for regular hourly employees. Employers are required to provide breaks for workers under the age of 18. The Wisconsin Department of Workforce Development (DWD) recommends that employers provide breaks to adults if they are providing them to minors, although that is a matter that should be established internally. Rest periods and breaks that are less than 30 minutes in length are considered part of work time and are to be paid.
Employers are required to apply federal and state labor laws appropriately. To learn more about Wisconsin employer requirements and to get answers to your questions, contact us at Moen Sheehan Meyer, Ltd. at (608) 784-8310 or online.