Question

Huche Company allows its employees to carry over unused personal time off (PTO) days (vacation, sick days, etc.) from year to year. In addition, employees have the option to "cash out" their unused days at the end of the year. John Keevens was just paid $685 for his unused PTO days. Since he is a nonexempt employee, John has questioned the amount of his last paycheck (which includes the $685). The PTO days push the paid hours over 40, and he wants to be paid for his overtime hours. What would you tell John?

Answer 1

The Fair Labor Standards Act (FLSA) requires employers to pay nonexempt employees time and one half of the employees' regular rate of pay for all hours worked over 40 in a workweek. Employers do not have to count paid holidays, paid time off (PTO), vacation, personal and sick leave hours taken by an employee toward the calculation of the overtime requirement, because these hours are not actually "worked" and are therefore not considered as hours counted toward overtime

so our advice to john not to claim one half of the employees' regular rate of pay, because PTO period will not be included in overtime period.