Overtime requirements can be difficult and hard to follow. But just one mistake in your payroll can result in costly compliance violation fines. That’s why we’ve prepared this handy guide to help you ensure that your employees are being correctly compensated for their extra hours.*

Step 1: Ensure Eligibility

While most employees that work a regular 40-hour week are entitled to overtime pay, according to the Fair Labor Standards Act, certain salaried employees are exempt from these requirements. In NY, an employee that earns more than $913 per week or works in an executive roll would be considered an exempt employee. You can learn more about exempt employee requirements from the New York City Bar.

Step 2: Review Hours Worked

Review your employees’ hours for each week. Any employees who worked for more than 40 hours have exceeded the average work week limit and are entitled to overtime pay.

Step 3: Calculate Pay

Determine your employees’ regular rate of pay for a normal workweek. For any additional hours worked, multiply their pay by 1.5. For example, if the regular rate is $12 per hour, the overtime rate would be $12 x 1.5 = $18 per hour. If the employee worked 10 hours of overtime, their overall overtime pay would be $18 x 10 = $180.

If you need more help with managing overtime or any other payroll and compliance issues, you can always turn to Brand’s Paycheck for innovative and streamlined solutions that can ease the everyday burdens of running your business.

*Note: This information is based on the federal Fair Labor Standards Act and New York State requirements. Other states may have different or additional rules for overtime pay.