Expert: Shirley McAllister, CPP, PHR - 10/16/2008

Question
Thanks for being here and helping America. Unlike some men I know.  We work for a company based in CT/Germany, but contract to and work for a Pennsylvania/International company in IT. We show an annual salary on the paystub and are paid bi-weekly. We work 40+ hours every week (full time). If we work overtime and do not use Holi or PTO time we get paid time/and a half. IF we work 40 + hours and use HOLI or PTO, we only get paid straight time for any over time. Is this legal in PA?  thanks for you time and Generosity as a woman.

Answer
This is how it works. Non Exempt employees are paid overtime under the FLSA Act for all hours worked in excess of 40 hours in any one week.

Note the words worked!

So if you work 46 hours you are paid 40 regular hours and 6 overtime.

If you work 38 hours and take a holiday you are paid for 38 hours. You are not paid overtime because although you are paid for 46 hours the 8 hours holiday is not counted as worked time.

If you work 36 hours and use 8 hours of PTO you are paid for 36 hours. You are not paid overtime because the 8 hours of PTO is not counted in the hours worked.

In order to be paid overtime you must actually work over 40 hours. Time off does not count toward the worked time.

If you are actually working more than 40 hours than you must be paid overtime. So if you work 45 hours in 4 days and are off on holiday than you should be paid 40 hours regular time, 5 hours overtime and 8 hours holiday pay for a total of 53 hours total.

If you work 10 hours on Monday, 12 hours on Tuesday, are off on PTO on Wednesday, work 10 hours on Thursday and 12 hours on Friday. you would be paid for 40 hours regular time, 2 hours of overtime and 8 hours of PTO time. You are only paid for 2 hours overtime because the 8 hours of PTO does not count toward overtime.

If you work 8 hours Monday, 8 hours Tuesday, off on PTO on Wednesday, work 8 hours on Thursday and 8 hours on Friday you are paid for 40 hours no overtime because the 8 hours PTO does not count toward overtime.

In some companies they also have a rule that if you are off the day before or the day after a holiday you will not be paid for the holiday. It is legal for them to have this policy.  If the company has this policy and you work 40 hours you will not be paid the PTO or the Holiday pay if it is taken the day before or the day after a holiday. Be sure to read your handbook and know what the PTO and vacation policy is.

The government and the state does not require vacation pay be paid. If it is paid the state will make the company go by whatever policy they have for the vacation or the PTO.


I hope the examples help you understand, if not let me know and I will try and explain it some more. Employees often are confused about PTO, Holiday pay and overtime.

Shirley