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With the holiday season fast approaching (scary- we know!), EctoHR recommends that employers publish or revisit their company calendar now. As part of office closings for holidays, clarifying expectations for employee responsibilities and payroll calculations is important as well.
One payroll issue that employers may wish to remind employees of is how the relationship of holiday pay, sick time, vacation, and such factor into time-and-a-half pay.
It’s the law
The Fair Labor Standards Act (FLSA) requires employers to pay nonexempt employees time and one half of the employees’ regular rate of pay for all hours worked over 40 in a workweek. Employers do not have to count paid holidays, paid time off (PTO), vacation, personal, and sick leave hours taken by an employee toward the calculation of the overtime requirement, because these hours are not actually “worked” and are therefore not considered as hours counted toward overtime under the FLSA. In other words, only “productive” pay is required to be factored into overtime calculations.
Now may be a good time to revisit your company policies on pay and present a refresher communication with employees in conjunction with the holiday calendar.
EctoHR is here to assist your company with all matters concerning exempt and nonexempt employee pay and benefits. Contact a team member at EctoHR at firstname.lastname@example.org or 810.534.0170.