The Fair Labor Standards Act of 1938 with its regulations gave stated and defined minimum wages, rules concerning working hours and identifying nonexempt and exempt employees for the overtime pay. Overtime is one of the most crucial considerations to determine how to pay your employees. Usually, the nonexempt employees are those who have a wage per hour, have to be paid for overtime which means working more than 40 hours a week. On the other hand, exempt employees are not paid. Surprisingly, every state practice their own laws on wages and hours which are even hard compared to FLSA’s requirements.
Many companies have met some issues with the FLSA while trying to work things right. To help a company to do this successfully, it should need some assistance with experts such as several accountants, employment-law attorneys, professional HR managers, HR consultants or the CFO. These people will study you current workers, the state of their employment and the way they are being paid and categorized. In case your consultant found out some issues regarding your payment structure, you have to correct them right away before suffering from the serious penalty for noncompliance. In worst situation, the Court usually grants liquidated damages that will require you to pay even twice the amount of the unpaid overtime.
No one would like to suffer the consequences. Better start planning the economics of your industry by deciding if the overtime payment would be based on an hourly basis or salary. If you have a hard time counting per month or season, better to pay an hourly wage. But if you want to keep your current work force of higher skills and low turnover, salary would be a good idea.
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