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Calculating Overtime Pay with Vacation and Holidays

Q: If a nonexempt employee works a full 40-hour workweek and also takes a day of paid vacation or holiday, is the employee entitled to overtime pay?

A: Not unless the employee actually works more than 40 hours in the workweek. According to the Fair Labor Standards Act, nonexempt employees must be paid overtime at time and one-half their regular rate of pay for all hours actually worked over 40 in a single workweek. Thus, in calculating how many hours a nonexempt employee actually works in a week, the employer does not have to count the paid vacation or holiday time towards the 40-hour workweek. For example, an employee normally works Monday through Friday, eight hours a day, and receives a paid holiday and does not work on the Monday. The employee then works Tuesday through Friday, eight hours a day, and is asked to work four additional hours on Saturday. The employee’s pay for the week would reflect a total of 44 paid hours, however since the employee actually worked only 36 hours, he would not receive any overtime pay.

 

This article is not intended as legal advice. Readers are encouraged to seek appropriate legal or other professional advice. Copyright 2004 Personnel Policy Service, Inc.

 

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