Beyond 9 to 5: Kentucky's Overtime Pay Requirements

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Dolly Parton's 1980 hit, "9 to 5," showcases her great voice and a bubbly melody that mask a darker message about working for an inconsiderate and insensitive employer.

Employee pay from 9 to 5 is rather simple: there's an agreed upon hourly wage or salary. Overtime pay -- time-and-one-half -- is also pretty simple, right? No, not always.

Here are answers to several frequently asked questions about overtime compensation:

Can an employer require an employee to work overtime? Yes.

What compensation must an employer pay to an employee for working overtime? The Kentucky Wage and Hour Act and the Fair Labor Standards Act require employers to pay employees time-and-one-half for all time worked in excess of 40 hours in a work week.

May an employer require its employees to take "comp time" in lieu of paying overtime wages? No. "Comp time" refers to time an employee may take away from work, like vacation leave, in a future work week so that the employer may avoid paying overtime wages for a prior week. For instance, if an employee works 45 hours in one week, an employer may offer an employee five hours off work the following week to offset the overtime worked. Both Kentucky and federal law prohibit the use of comp time; employers must pay wages at a rate of time-and-one-half to those employees who work more than 40 hours in any given work week.

I am provided housing as part of my hourly wage; does this impact my overtime wages? Yes. Kentucky law sets forth the necessary calculation to determine the base rate of pay and overtime rate.

Let's suppose an employee works for a property management company; he's paid $10 per hour and receives an apartment valued at $800 per month. If the employee regularly works 50 hours per week, what overtime wages must the employer pay each pay period?

First, determine the value of the housing on a weekly basis: $800 x 12 months = $9,600 per year; $9,600 divided by 52 = $184.62 per week.

Second, determine the total wages paid by incorporating the value of the housing to the stated hourly wage: multiply the hours worked per week by the hourly wage, 50 x $10 = $500 per week, and then add the weekly value of the housing, $500 + $184.62 = $684.62 total wages paid.

Third, divide the total wages paid by the number of hours worked to determine the actual hourly wage: $684.62 divided by 50 = $13.69 actual hourly wage incorporating the housing benefit.

Fourth, multiply the actual hourly wage by 1.5 to determine the necessary overtime wage to be paid for all hours in excess of 40: $13.69 x 1.5 = $20.54.

Fifth, multiply $13.69, the actual hourly wage, by 40 hours (which equals $547.70), and multiply the overtime wage, $20.54, by the overtime hours, 10 (which equals $205.40), and add the amounts together to calculate the total straight time and overtime pay: $547.70 + $205.40 = $753.10.

Finally, subtract the value of the housing provided, $184.62, from the total straight time and overtime pay, $753.10, to determine the total monetary compensation the employee should receive for a 50-hour work week: $568.48.

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If you're an employee who has not been paid for overtime hours worked, give us a call today for a free initial consultation.

If you're an employer who has questions about overtime pay, whether an employee is exempt or nonexempt from overtime pay requirements under state or federal law, of if you simply have questions regarding the Kentucky Wage and Hour Act or the Fair Labor Standards Act, give us a call today for a free initial consultation.