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When Must Employers Pay Overtime?

Employers must follow many various rules that apply to their employees. Companies pay employees for their work either by salary or wage. Wage earners get paid by the hour, while salaried employees usually get paid a set amount of money each pay period. It is important for employers to understand the laws that apply to their business, especially when it comes to paying employees. An experienced business law attorney will help you with any questions or disputes regarding overtime pay.

What are Wage Workers?

Wage workers are employees who are paid for the number of hours they work. You calculate wage workers’ pay based on how many hours they worked during the pay period. A pay period may be one week, two weeks, or another length of time you designate as a pay period. As a reference, salaried workers get paid a specific amount for the year, which is spread evenly between pay periods, regardless of the number of hours they work. Salary workers are often members of management or are in supervisory positions within the company. If you have an hourly wage, you are a wage worker.

What is Overtime?

Wage employees typically work eight hours a day, totaling 40 hours a week. A regular work week for wage workers is standard at 40 hours. Any time over 40 hours that an employee works would be considered overtime. You calculate overtime by multiplying regular wages by 1.5. Therefore, overtime is also called time and a half. Per Wisconsin law, most wage employees are owed time and a half for overtime hours worked. It is important to note that vacation and sick time do not count toward hours worked in a week. 

A workweek may vary from industry to industry or from company to company. An employer must establish a week based on their own needs. A week consists of seven consecutive days for purposes of determining overtime. For example, a week may start on Monday and end on Sunday. An employer does not have to pay overtime to an employee who works more than eight hours in a day. Rather, the law requires overtime payment after 40 hours have been worked in one week. 

Exemptions to Overtime Pay Requirements

There are a variety of workers who are exempt from overtime pay laws. Some agricultural employees, management and executive employees, taxi drivers, employees of motor vehicle dealers, movie theater employees, and others are exempt from overtime pay. These workers are not required to receive overtime pay even if they work more than 40 hours a week. Also, most non-profit organizations are not required to pay overtime. It is best to check with an attorney or with the Wisconsin Department of Workforce Development to verify exemptions to overtime pay. It is essential for employers to understand and follow overtime pay laws. 

Overtime pay is something that most wage workers are entitled to receive. For questions regarding overtime pay or other laws that apply to your company, contact us at Moen Sheehan Meyer, Ltd. at (608) 784-8310 or online to schedule a consultation. 

Published March 20, 2023
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