September 11, 2019
Because holiday, PTO, and vacation hours are not actually hours worked they do not count towards overtime pay.
Under the Fair Labor Standards Act (FLSA), an employer who requires or permits an employee to work overtime is generally required to pay the employee premium pay for such overtime work. Unless specifically exempted, employees covered by the FLSA must receive overtime pay for hours worked in excess of 40 in a workweek at a rate not less than time and one-half their regular rates of pay. The key consideration for premium pay under the FLSA is whether or not the employee actually works more than 40 hours in the workweek, not just that he or she is paid for more than 40 hours in the workweek.
For example, an employee is off work for one day for a company-paid holiday and takes the next day as a paid vacation day. He then works 10 hours for the next three days of the workweek. Under the FLSA, he would be paid straight time at his regular rate for the 46 hours recorded for that week as follows: 8 hours of holiday pay + 8 hours of vacation pay + 30 hours of regular pay for time worked = 46 hours at his regular pay rate. Employers should also check state laws for overtime requirements regarding holiday and vacation time. Some states have more employee-generous overtime laws requiring premium pay for time worked – it is important to review overtime pay laws for your state.
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