Pay at 1.5× the regular rate for hours worked over 40 in a workweek, required for non-exempt employees under FLSA.
Under FLSA, non-exempt employees must be paid 1.5× their regular rate for hours worked over 40 in a workweek (some states have additional daily overtime — California, Alaska, Nevada). The "regular rate" includes most non-discretionary bonuses and shift differentials, which makes overtime calculations more complex than (hours × hourly rate × 1.5).
Exempt vs. non-exempt classification turns on both salary level and job duties. Misclassification — treating an employee as exempt when they should be non-exempt — creates back-wage liability for unpaid overtime, often extending back 2-3 years.
PEOs handle overtime calculations correctly across multi-state, multi-rate, and bonus-included scenarios. For businesses with complex pay structures (commission, shift differentials, bonuses), this calculation accuracy can be a meaningful operational benefit.
Pay at 1.5× the regular rate for hours worked over 40 in a workweek, required for non-exempt employees under FLSA.
Under FLSA, non-exempt employees must be paid 1.5× their regular rate for hours worked over 40 in a workweek (some states have additional daily overtime — California, Alaska, Nevada).
Most PEO buying decisions touch several related concepts at once. Overtime pay typically comes up alongside the other terms in this category. Closely related terms include Fair Labor Standards Act (FLSA), Minimum wage, Worker classification.
This is one entry from our PEO glossary covering payroll, benefits, workers comp, HR compliance, and PEO mechanics. Browse all terms.
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