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Employees, Vacation, and Overtime Pay

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Question: I have a question regarding paying an employee overtime.  Let’s say an employee has 43 hours owed him/her in a pay week.  Of the 43 hours, 24 hours are either vacation and/or holiday pay.  Do we pay 40 hours regular pay and three hours overtime?  Or can we pay 43 hours regular time?  My interpretation is any pay over 40 hours per week has to be paid at the overtime rate after 40.  

Answer: Great question because it underscores a common misconception about the obligation to pay overtime. Under the Fair Labor Standards Act, overtime is required only after 40 hours of actual work—an employer is not required to count holidays or vacation days or days on sick leave when determining whether 40 hours has been reached. So, in the example above, the employee is owed 43 hours at his or her straight-time rate. Of course, an employer can choose to pay overtime regardless of how 40 hours is reached but doing so is not required by the Fair Labor Standards Act. (Caveat: A few states require overtime after eight hours in a day. This Q&A applies only to the rest of the states where the FLSA 40-hour overtime requirement applies.)  

This response is intended for general informational purposes only and should not be construed as legal advice or a legal opinion, nor is this column a substitute for formal legal assistance. For help with particular legal needs, members are invited to consult with ACCA’s LegalTools Counsel, Brooke Duncan III of Adams and Reese LLP. Mr. Duncan can be reached at 504-585-0220 or by email at

Brooke Duncan

Posted In: ACCA Now, Legal

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