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Global Work Glossary

Lost in a maze of global employment jargon? Find your way out with our handy collection of work and HR terminology

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Overtime Pay

What is overtime pay?

Overtime pay is compensation that’s provided to employees for hours they’ve worked beyond their standard workweek or contract. This is often paid at a higher rate to compensate them for the additional effort invested.

Overtime pay serves as an incentive for employees to take on additional hours when needed. However, it is also a mandatory requirement in many countries as labor laws require that employees aren’t overworked and are fairly compensated for the work they put in.

The specific laws around overtime pay vary from country to country. In the US, for example, the Department of Labor’s Fair Labor Standards Act (FLSA) outlines that most employees are entitled to receive overtime pay at a rate of at least 1.5x their regular rate for all hours worked beyond 40 in a workweek. However, some executive, administrative, or professional roles are exempt.

To accurately manage overtime pay across the globe, it’s best to use an HR solution such as Multiplier to automate calculations. This will take into account all necessary factors, including whether the worker is an hourly or salaried employee, their rates of pay, and which bonuses they’ve received.

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