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Jul21

PTO vs Overtime vs Regular Hours

Does PTO count as regular hours worked? Can overtime be paid within the week or pay period when PTO is taken in the same week?

The federal Fair Labor Standards Act (FLSA) establishes compensation guidelines for employees. Under the FLSA, employees are either non-exempt or exempt. Non-exempt employees must be paid for all hours worked and are subject to overtime and minimum wage requirements prescribed by the FLSA. Conversely, exempt employees receive a fixed predetermined salary and are excluded from overtime pay provisions.

Non-exempt employees must be paid for every hour actually worked. Paid time off including holidays, vacation, or sick leave is not considered time worked. Thus, such time isn’t required to be included in the total hours worked for overtime purposes

Non-exempt employees receive overtime pay for hours worked over 40 in a workweek at a rate not less than time and one-half their regular rates of pay.

Let’s say an employee worked 38 hours and used 8 hours of vacation time, totaling 46 hours for the week. The employee is not entitled to overtime since he only actually worked 38 hours.

However, an employee who worked 42 hours and used 8 hours of vacation time, totaling 50 hours for the week, would be entitled to 2 hours of overtime pay.

This entry was posted on Tuesday, July 21st, 2015 at 8:17 pm and is filed under
Compensation, Labor Laws.
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