A business owner has to understand some basics about how labor laws work. Not taking the time to speak to someone who can educate you on such laws may result in a rash of lawsuits or even a company shutdown.
One of the most crucial elements of business ownership is understanding wage and hour laws, especially when it comes to overtime. Knowing how much you have to pay employees is integral to staying up and running. Keep these three essential facets of California's overtime laws in mind to avoid getting in trouble.
1. Basic overview of overtime
When you need help above and beyond the standard eight-hour workday, you have to pay your employees appropriately for it. Many companies do not start calculating overtime until an employee hits 40 hours of work per week. You must pay any nonexempt person who works over that 40-hour weekly threshold his or her regular rate of pay, plus half the regular rate of pay. It is typically known as "time and a half," and it is the standard overtime rate.
2. Overtime even when you did not approve it
You may find some employees lingering after their eight-hour shift is over. Do you have to pay them overtime if they go over 40 hours? The short answer is yes. Even if you do not approve someone to work more than her or his weekly minimum, you have to pay overtime.
4. Exceptions to the overtime laws
You may have heard of exempt and nonexempt employees and wonder what that means. You may not have to pay an exempt worker overtime if he or she fits into one of these categories:
An exempt employee must make at least $455 per week. They must also collect a salary, not an hourly wage.
If you have questions regarding whether you need to pay an employee overtime, get help from an attorney. With so many laws in place, you want to make sure you do not make a mistake.