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Overtime In the Bank

October 29, 1998
Related Topics: Wages and Hours, Featured Article
Are you allowed to "bank" overtime—saving it up for later use, such as to provide vacation time or something else for employees?

Under the Federal Fair Labor Standards Act and most state wage and hour laws, you cannot bank overtime except in extremely limited circumstances. Employees who are exempt from the overtime law can get "time off" in a sense, but if you treat them as hourly employees for pay and leave purposes, you run the risk that they will be found to be non-exempt (and you would have to pay overtime at the time-and-a-half rate).

Source: Epstein, Becker & Green, New York, June 16, 1998.

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