Payment of Overtime Hours - Tilson


Payment of Overtime Hours

Regulations & Compliance | May 2015

In Indiana, an employer is required to pay overtime when a non-exempt employee physically works more than 40 hours in a week. There are some very specific exclusions, and those can be found in the Indiana Code under Section 22-2-2.

Here is an overtime scenario:

Employee schedule: Sunday, off; Monday, worked 8 hours; Tuesday, 8 hours; Wednesday, holiday off (paid 8 holiday hours); Thursday, 8 hours; Friday, 8 hours; and Saturday, 8 hours.

In the above example, the employer would not be required to pay overtime because the employee didn’t physically work over 40 hours. Vacation, holiday and other hours in which the employee is not physically at work do not count toward the 40-hour threshold.

The employee will be paid for 48 hours on his check, but none of the hours is required to be paid at the overtime rate of time and a half. His check would report: regular hours, 40; holiday hours, 8.

If, instead, the employee worked 10 hours rather than 8 hours on Saturday, his employer would be required by law to pay the employee 2 hours at the employee’s overtime rate. That is because his total hours at the workplace equal 42, so two of those hours would need to be paid at the time-and-a-half overtime rate. In this case, his check would report: regular hours, 40: overtime hours, 2; holiday hours, 8.

An employer is only required to pay overtime when an employee physically works over 40 hours. The above employer has the discretion to pay everyone who worked any hours on Saturday at the time-and-a-half overtime rate. Employers are always allowed to pay more hours at the overtime rate, but they can never pay fewer overtime hours than they are required.

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