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A small launch can still be covered
Department of Labor guidance distinguishes enterprise coverage from individual coverage. The ordinary enterprise test includes at least two employees and at least $500,000 in annual business volume; specified institutions receive different treatment. Individual interstate-commerce coverage can apply even below that volume.
A modest startup budget therefore does not settle coverage. Nor does an advance-approval policy waive overtime already earned. Exemption depends on the actual duties, compensation and applicable rules.
Fictional example: 45 hours at a $20 regular rate
Assume the employee is covered and nonexempt, and no other compensation affects the $20 regular rate. This illustration excludes employer costs.
| Pay component | Calculation | Amount |
|---|---|---|
| Straight time for all 45 hours | 45 × $20 | $900 |
| Extra half-time premium on the five overtime hours | 5 × $10 | $50 |
| Total | Equivalent to 40 × $20 plus 5 × $30 | $950 |
Why 35 hours next week does not change it
The workweek is a fixed 168-hour period. A following 35-hour week does not erase the five overtime hours by producing a two-week average of 40.
The extra premium above is half-time because straight time was already counted for all 45 hours. Other compensation, including bonuses, can change the regular-rate calculation. State or local wage rules and leave, payroll taxes and other employer costs also affect the actual staffing budget.
Scope
- This supplies no current salary-exemption threshold or contractor/joint-employer determination, and no complete regular-rate or state/local calculation.
Next step
Price expected busy workweeks using the applicable pay rules rather than averaging them against quieter weeks.
Sources & review notes
U.S. Department of Labor, Wage and Hour Division
Passage, dates and research notes
official-guidance · Enterprise and individual coverage
Individual Coverage
Read enterprise and individual coverage, including the two-employee and $500,000 enterprise volume tests and listed institutions; individual interstate-commerce coverage can apply below that volume. Fact sheet revised July 2009 (day not specified).
U.S. Department of Labor, Wage and Hour Division
Passage, dates and research notes
official-guidance · Basic requirements and workweek
Averaging of hours over two or more weeks is not permitted
Read the complete main fact sheet. Covered nonexempt employees, regular-rate overtime, 168-hour workweek, salary and unauthorised overtime points only. No current executive/administrative/professional exemption salary threshold was researched or quoted. Revised October 2019 (day not specified).
Detailed rule records (1)
For covered nonexempt employees, FLSA overtime is generally at least one and one-half the regular rate for hours over 40 in a fixed workweek. Hours cannot be averaged across workweeks. Enterprise and individual coverage must be assessed separately.
Fact Sheet #14: Coverage Under the FLSA Fact Sheet #23: Overtime Pay Requirements of the FLSARelated case records
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