Overtime Laws in Illinois: Everything You Need to Know

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Keeping track of your employees’ overtime hours is easier said than done – there can be a lot of factors to keep in mind. For many business owners, it can get overwhelming. But that’s why we at actiTIME have gone ahead and done all the footwork for you so you can get the information you need, fast! Here’s what you need to know about overtime law in Illinois.

Overtime laws in Illinois

What Are the Overtime Laws in Illinois?

Some states have their own legislation when it comes to overtime pay. Others follow the Fair Labor Standards Act (FLSA), a law passed in 1938 that forms the basis for many regulations pertaining to business and employees. For the most part, Illinois takes after the FLSA, making for a simpler system of tracking overtime hours. Before reading further, it might be good to refresh your knowledge of overtime with our primer here.

A company’s workweek is defined as a seven-day period made up of consecutive, 24-hour days. In Illinois, it can start on any day of the week (and different positions in one company have workweeks starting on different days), but they have to be consistent.

According to the FLSA, workers start accumulating overtime hours for every hour they’ve worked past forty in a workweek. Hours can’t be averaged out if employees have worked sporadic shifts over a period of a few separate workweeks.

Yes
Week 1:
48 hours
Week 2:
32 hours
Total:
72 regular hours
+ 8 overtime hours
No
Week 1:
48 hours
Week 2:
32 hours
Total:
80 regular hours

Illinois labor laws only count weekly overtime rates – if a worker works more than 8 hours in a single workday, these hours do not count as overtime (unlike in certain other states).

For Illinois employers, there are two ways of paying out overtime hours:

  • Overtime rate: paid out at 1.5x the employee’s regular rate of pay;
  • Compensatory time: each overtime hour worked means the employee can get 1.5 paid hours off.

Workers can accumulate compensatory hours, but only until they reach 240. After that, all additional overtime hours have to be paid out at overtime rates.

How Do I Calculate Overtime Pay in Illinois?

With everything else that employers have to keep in mind, tracking overtime regulations can seem overwhelming. But it’s really simple once you get the hang of it.

In Illinois, a minimum wage worker will earn $9.25 an hour, which means that any overtime they work will be paid out at $13.88 an hour. Their monthly payout, before taxes, could be something like this:

Week 1:
Week 2:
Week 3:
Week 4:
Regular hours:
Overtime hours:
Total:
39 hours (39 regular)
47 hours (40 regular + 7 overtime)
42 hours (40 regular + 2 overtime)
45 hours (40 regular + 5 overtime)
159 x $9.25 = $1470.75
14 x $13.88 = $194.32
$1665.07

Calculating regular and overtime rates of pay gets easier with time. There are a few extra things you need to keep in mind, however.

For employees working in retail and sales, commission often makes up a large part of their salary. Their employers thus have to run a few extra calculations each week in order to discover the base rate of pay that then is used to determine overtime rates.

All you need to do is add a salesperson’s commissions to their earnings (paid out at their regular pay rate) and then divide that lump sum by the number of hours they worked that workweek. For example:

Week 1:
Regular pay:
40 hours x $9.25 ($370) + commission ($300) = $670
$670 / 40 = $16.75

When overtime hours are involved, the calculation could look like this:

Week 2:
Regular pay:
Overtime pay:
Total regular hours:
Total overtime hours:
Total:
43 hours x $ 9.25 ($397.75) + commission ($250) = $647.75
$647.75 / 43 = $15.06
$15.06 x 1.5 = $22.59
40 x $15.06 = $602.40
3 x $22.59 = $67.77
$670.17

After taking into account commissions, you’ll be wanting to look at the bonuses your employees have earned. These too will have to be reflected in the regular rate of pay that’s used to calculate overtime rates. To do this, you first add the amount earned at your worker’s base rate during a bonus period and then add that sum to the bonus itself. Once you divide the resulting amount by the hours they worked, you get the regular rate of pay.

Take a worker who’s put in 160 hours that month at minimum wage and gets a $1000 bonus on top, and the calculation would be as follows:

160 hours x $9.25 = $1480 

Regular hours: ($1480) + bonus ($1000) = $2480
Regular rate: $2480 / 160 = $15.50
Overtime rate: $15.50 x 1.5 = $23.50

With the regular pay rate calculated above, you can now find out how much overtime you need to be paying your employee:

Week 1:
Week 2:
Week 3:
Week 4:
Total pay:
36 hours (36 x $15.50) = $558
47 hours (40 x $15.50 [$620] + 7 x $23.50 [$162.75]) = $782.75
40 hours (40 x $15.50) = $620
37 hours (37 x $15.50) = $573.50
$2534.25

Who Is and Isn’t Qualified for Overtime Pay in Illinois?

Not every employee enjoys equal protection under the FLSA, it must be said. Certain conditions must be met, and the original laws were written with the potential exploitation of manual laborers in mind.

One of the two following conditions must be met in order for an employee to claim overtime pay:

  • Their income per week has to be less than $455 (yearly salary: $23,660);
  • Their position can’t appear on the exemption list (see below).

There are a few positions that are automatically entitled to overtime rates under the FLSA. These include firefighters, police, paramedics and other first responders, as well as nurses and paramedics. Manual laborers like factory workers, stockhouse employees are also included.

Manual laborers like factory workers, cashiers, warehouse stockers and others are automatically given overtime pay by the FLSA. Nurses and paralegals are also entitled, as are first responder workers (police, firefighters and ambulance drivers).

The following jobs are deemed exempt from overtime law according to the FLSA so long as the employees in question make more than $455 a week:

Executives (who manage more than two people full-time);
Administrative workers;
Non-manual professional workers (artists, teachers, programmers);
External salespeople;
Independent contractors;
Certain transportation and agricultural workers;
Certain live-in employees.

Illinois law adds a few more:

  • Workers in a company with three or fewer employees;
  • Members of religious organizations when they are actively working in said organizations;
  • Mechanics and salespersons in companies dealing with the sales and servicing of farm equipment, cars, trucks and other vehicles.

If you need to resolve extra exemption-related questions, you should consult both the FLSA and Illinois state labor laws.

Track Overtime Using actiTIME!

In Illinois, overtime payment laws are different than in other states. Knowing those differences equips you to pay your workers fairly and keep the books clean.

The process doesn’t have to be a headache, though – the products and services here at actiTIME simplify the process and help you spend more time on your business. Curious? Read on to find out more.

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