What Is Overtime for Biweekly Pay?

Overtime refers to the compensation an employee receives for working beyond their standard scheduled hours. This additional pay comes at a higher rate than their regular wages. Biweekly pay periods involve an employer paying employees every two weeks, resulting in 26 paychecks over a year. Understanding how these intersect is important for proper payment and compliance with labor laws.

Understanding Overtime Fundamentals

Overtime compensation is governed by the Fair Labor Standards Act (FLSA). The FLSA establishes minimum wage, overtime pay, recordkeeping, and youth employment standards for most employees. Non-exempt employees, those paid hourly, must receive overtime pay for hours worked over 40 in a workweek.

A “workweek” under the FLSA is a fixed, regularly recurring period of 168 hours, which consists of seven consecutive 24-hour periods. It does not need to align with the calendar week and can begin on any day and at any hour. The “regular rate of pay” is the hourly rate used to calculate overtime and includes all compensation for employment, such as an employee’s hourly wage or salary. Certain payments, like discretionary bonuses or reimbursement for business expenses, can be excluded if they meet statutory requirements. The standard federal overtime rate is 1.5 times the employee’s regular rate of pay for all hours worked over 40 in a workweek.

Overtime Calculation for Biweekly Pay

The biweekly pay period does not alter that overtime is calculated on a workweek basis. The FLSA requires that each workweek stands alone for overtime determination. Hours cannot be averaged across the two weeks of a biweekly pay period to avoid overtime obligations, as this practice is incorrect under federal law.

For example, if an employee works 35 hours in the first week of a biweekly period and 45 hours in the second week, they are still entitled to overtime pay for the 5 hours worked over 40 in the second week. Employers cannot average these hours to avoid overtime. The employee receives their regular rate for 35 hours in the first week, and their regular rate for 40 hours plus 1.5 times their regular rate for the 5 overtime hours in the second week. Similarly, if an employee works 50 hours in the first week and 30 hours in the second, 10 hours of overtime are due for the first week. Employers must track hours worked per workweek to accurately determine and pay overtime.

Important Considerations for Employers and Employees

The FLSA establishes federal minimum standards, but many states have their own overtime laws, offering greater protections to employees. These state laws may include daily overtime requirements, mandating overtime for hours worked over a certain threshold in a single workday, or different thresholds for weekly overtime. When federal and state laws differ, employers must follow the law that provides the most favorable outcome for the employee.

Accurate time tracking is important for employers and employees. Employers must maintain detailed records of all hours worked by non-exempt employees, including start and stop times, and any breaks or meal periods. This ensures compliance and can prevent disputes over unpaid wages. Employees should also keep their own records of hours worked to verify their pay.

“Hours worked” include any time an employee is on duty, on the employer’s premises, or permitted to work. This includes time spent in job-related meetings, training, or travel during regular work hours. Employers must also maintain records, such as employee identification information, regular pay rates, total hours worked each workweek, and total overtime pay. These records must be retained for specific periods, at least two to three years, and be available for inspection by the Department of Labor.