Must You Pay Time and One-Half?

April 13, 2006

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There are four exceptions to the rule that overtime must be paid on the basis of one and one-half times an employee's regular rate, under federal law. The first three require an agreement between the employer and the employee before overtime work is performed; no agreement is necessary for the fourth.

Piece workers may be paid one and one-half times their piece rates for overtime work.
Employees working at two or more hourly rates (for doing two different jobs within one business) may be paid one and one-half times the hourly rate applicable during overtime hours.
Overtime may be paid at one and one-half times a basic rate established by the agreement for overtime-pay purposes, provided it is in accord with administrative regulations.
Employees of wholesale petroleum distributors may be paid one and one-half times the statutory minimum rate for part of their overtime work.

Chances are, most of your employees will not fall into any of these groups, and you will need to go about determining their regular rates in accordance with the law.