In Missouri, like in many other states, understanding and adhering to overtime laws is crucial to ensuring compliant business operations for employers.
Missouri overtime rules ensure commitment to fair labor practices and employee well-being. In this article, we explore the intricacies of Missouri law on overtime pay, providing a comprehensive guide for employers to navigate these regulations effectively.
Table of Contents
Who is Eligible for Overtime Pay in Missouri?
Missouri overtime rules are applied to all employees covered under the Fair Labor Standards Act (FLSA). The federal law states that all employees who work more than 40 hours in a workweek are typically eligible for overtime pay. The overtime pay is also calculated at 1.5 times the employee’s regular pay rate for each hour worked beyond the standard 40-hour threshold.
While most hourly workers in Missouri are entitled to overtime pay, there are non-exempt employees. Therefore, employers must know the difference between exempt vs. non-exempt employees.
In simple words, non-exempt employees are those who are covered by the overtime provisions of the FLSA. They are, therefore, entitled to overtime pay whether they are full-time or part-time employees, irrespective of the business size that employs them. Exempt employees, however, are not eligible for overtime pay under the FLSA. Specific categories of workers who are exempt from Missouri overtime rules include:
- Executive
- Administrative
- Professional roles such as chefs, lawyers, CPA, etc.
- Inhouse salesmen
In most cases, exempt employee’s primary duties are managerial, administrative, or professional. For example, an exempt executive must regularly supervise two or more other employees, have management as the primary duty, and have genuine input into other employees’ job status decisions (such as hiring, firing, or promotions).
Employers must diligently classify employees correctly to avoid potential legal repercussions and uphold fair labor standards.
Rules of Overtime in Missouri
- Missouri law on overtime pay affects employees across categories, except exempt employees.
- Employers should be aware of overtime rules in the state to ensure that non-exempt employees, whether hourly or salaried, receive fair compensation for their extra work hours.
- Missouri overtime rules also allow tipped employees to balance the unique nature of their compensation with the principles of labor rights.
Let’s take a look at these rules for each type of employee.
(A) Overtime pay for tipped employees
Missouri allows employers to consider the tips employees receive while deciding pay for tipped employees. The state will enable employers to use a “tip credit” system, where tipped employees can be paid a lower minimum wage, up to 50% of the state minimum wage.
However, when calculating overtime pay for tipped employees, employers must base the calculation on the entire state minimum wage, not the reduced tipped wage. Simply put, when calculating the pay for tipped employees, employers should use the overtime rate at 1.5 times the full state minimum wage without any deductions for tip credits.
This Missouri law on overtime pay for tipped employees ensures they receive fair compensation per federal labor laws.
(B) Overtime for salaried employees in Missouri
Not all salaried employees in Missouri are exempt from receiving overtime pay. All salaried employees who are non-exempt and earn less than the threshold of $684 per week are generally eligible for overtime pay.
If such salaried employees have regular work weeks, then employees are obligated to make overtime pay at 1.5 times their regular hourly rate for hours worked beyond the standard 40-hour workweek. However, there is a unique case of non-exempt salaried employees with fluctuating work weeks. Such employees in Missouri may qualify for overtime pay under the Fluctuating Workweek Method (FWW). This method allows for an overtime premium of one-half (0.5) times their regular hourly rate, even when their workweek hours fluctuate. This arrangement provides a way to compensate salaried employees with varying work hours each week but still work overtime.
Is overtime mandatory in Missouri? What happens if my employees refuse to work overtime?
In Missouri, no specific state laws mandate overtime work for employees. However, under the Fair Labor Standards Act, employers have the legal right to require their employees to work overtime. There are no restrictions on the number of hours employees can be required to work overtime in any workweek. It gives employers in the state the legal right to lawfully require employees to work more than the standard 40-hour workweek.
Refusing to comply with an employer’s request to work overtime can lead to lawful termination or other disciplinary actions against the employee according to company policies. Therefore, the employee or the employer can terminate the employment relationship at any time for any lawful reason.
Missouri overtime exemptions
In Missouri, overtime exemptions are governed by both federal and state laws. Therefore, employers in the state should be aware of the exemptions in both laws.
Federal overtime exemptions
Under the Fair Labor Standards Act (FLSA), certain occupations are exempt from overtime pay, including executives, administrative employees, and professionals earning at least $684 per week.
It also includes computer professionals earning $684 per week or at least $27.63 per hour.
Also, highly compensated employees earn more than $107,432, and outside sales employees are exempt.
Missouri overtime exemptions
Missouri state law which is followed for overtime calculation is the Missouri Revised Statutes Title XVIII. Labor and Industrial Relations § 290.505. Overtime compensation, applicable number of hours, exceptions.
Under the Missouri state law exemptions for voluntary work, foster parents, employees in specific camps, students working for educational institutions in exchange for benefits, private residence workers, babysitters, golf caddies, newsboys, commission-only employees, employees in businesses with gross income less than $500,000 annually. It also exempts nonviolent offenders in correctional facilities and certain agricultural workers.
Employees working less than 4 months per year in a resident or day camp and working on or about a private residence for at most 6 hours per shift are exempted.
Fluctuating Workweek Method (FWW) in Missouri
We already discussed how workers working irregular work weeks are paid under FWW method in Missouri. Such employees are entitled to an overtime premium of one-half (0.5) times their regular hourly rate.
Let’s understand this with an example. Suppose an employee has a fluctuating work schedule; they sometimes work 40 hours a week and other times more or less. If for a week they worked 50 hours, then their overtime pay will be calculated like this:
We will assume they earn $800 that week.
Hourly rate:
$800 / 47 = $17.02 per hour
To calculate the overtime rate, we will multiply the hourly rate by 0.5 for every overtime hour during the week.
$17.02 per hour x 0.5 = $8.50 for each overtime hour worked
Total overtime pay: $8.50 x 10 overtime hours = $85
How does Truein help with overtime management?
An AI-enabled, cloud-based time and attendance management software – Truein also has robust overtime tracking features. With Truein, employers can simplify the process of tracking, calculating, and managing overtime hours and pay.
To ensure that time is tracked automatically and accurately, it allows employees to clock in and out using their phone, eliminating the need for manual time tracking. Truein has GPS geofencing capabilities to ensure accurate recording of employees’ hours worked at their designated sites.
It reduces the risk of errors in overtime calculations or time theft. Companies can set up their overtime rules and rates, and our software can automatically calculate overtime hours and rates based on the rules and regulations specific to the employer’s requirements.
For adherence to local and state labor laws, Truein has over 70 customizable policy templates that employers can use to set up customized overtime policies to align with their specific business requirements and compliance needs. This flexibility ensures that the system can adapt to various overtime scenarios.
Managers can monitor employee work hours and overtime through the Truein dashboard. This enables proactive overtime management, helping employers stay within budget and compliance limits. Furthermore, Truein can seamlessly integrate with payroll systems, simplifying the process of incorporating overtime hours and rates into payroll calculations.
This reduces administrative workload and minimizes payroll errors. Employers can also use its reporting and analytics to generate detailed reports on overtime hours, costs, and trends. These reports can be valuable for budgeting and strategic decision-making.
Truein is scalable, making it suitable for small and large enterprises with diverse workforce needs. Learn more about its overtime management features here.
Conclusion
Missouri law on overtime pay can be complex for both employers and employees to understand. That is why I created a comprehensive guide on Missouri overtime rules.
Employers must ensure they comply with state and federal labor laws. Misclassifying employees as exempt or not paying eligible overtime pay can result in costly legal disputes and penalties.
Employers should regularly review their workforce and job classifications to ensure their employees are appropriately categorized and compensated according to the applicable overtime regulations. Truein can help overtime management and ensure that the company follows the legal framework through policy implementation and accurate overtime tracking.
