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Banked Hours vs. Overtime Pay: What Should I Choose?

Photo by Dylan Gillis on Unsplash

What’s the Difference Between Banked Hours and Overtime Pay?

The most common way that most workers react to working extra hours is asking for overtime pay. According to the FLSA, overtime hours are counted as any time worked over 40 hours in a workweek (a consecutive set of 7 days, set down beforehand as part of your contract with employees). This usually isn’t dependent on how many hours a day are worked, though your state may have additional rules regarding that, and any extra hours are paid out at 1.5x the regular rate of pay.

What Can Be Done with the Accrued Banked Overtime?

Using banked hours can benefit both employees and employers alike: it gives extra paid vacation time, and it can help alleviate financial strain on small businesses. But whenever workers debate over whether to take banked hours vs. overtime pay, the main thing they want to know is how they can use their banked time and if there are any additional rules.

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