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How Much to Pay Employees - Understanding Employee Compensation

The Fair Labor Standards Act, or FLSA, contains certain provisions that affect how businesses pay their employees. For example, employees determined to be "non-exempt" under the FLSA need to be paid at least the federal minimum wage for the first 40 hours they work each work week. In situations where the state minimum wage is higher, employers must pay the greater wage. Of course, the FLSA also defines what "hours worked" means, which is discussed in the video below.

Overtime payments are also defined by the FLSA, and it requires that employers pay overtime to non-exempt employees working over 40 hours per work week.

In addition to wages and overtime, the FLSA requires that employers subject to its minimum wage provisions must post an explanation of the act in a place within the workplace that can easily be seen by employees. It also mandates that certain records be kept by employers regarding wages, hours, and other items.

For additional information on how FLSA provisions affect how employees are paid, download our free e-book, 7 Questions Every Small Business that Hires Employees Will Have to Answer, at paychex.com/7questions.

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