I work for a firm that has hourly and salary positions. Like most companies, we are trying to control our overtime costs. Generally, it is difficult to manage our work process due to time constraints that come up at the last minute and require overtime to meet the deadlines. I'm interested in trying to find out what are the legal options for paying our hourly employees overtime. We currently pay them 1.5 times their hourly rate for time beyond 10 hours/day and/or 40 hours per week. After looking at many of the previous threads, it looks like we can stay within the law by telling the hourly staff not to work sometime during the same pay week to offset the time over ten hours that would have been overtime. For example, we could say work 6 hours on Tuesday to offset the 10 hours they worked on Monday. Is there any legal option to allow them to accumulate the overtime and take time off, either at 1.0 or 1.5 times the amount of overtime, at some point in the future? If not, is there any other legal option to compensate people who work overtime?
Thanks for your help.

It is perfectly legal to reduce hours during the same workweek to keep hours below 40.

Beyond that, unless your state requires it (I'm not a MI person) you arent required to pay double time (unless it is part of a CBA).

You may not "bank" comp time. That is not permitted in private industry.

While you must pay overtime worked, you need to make sure that employees are not working unauthorized overtime. (ie a manager must approve OT). If unauthorized, employees must be paid but can be disciplined.

I would elimate paying daily overtime. It is not required by federal law or in your state.

Simply pay the employees time and a half for working more than 40 hours in a work week.

If they get the 40 hours in on Monday, Tuesday and Wednesday, then someone needs to decide if their services are needed on Thursday and/or Friday. If so, eat the overtime. Otherwise, they can have a very long weekend.

For the record, double time is never required by law in any state except California.

Thanks for the input everyone.
I wouldn't have a problem with limiting hourly employees hours later in the week to stay within 40 but when the rush happens late in the week it leaves you with no option because it has to be paid during the same work week. It's too bad we aren't allowed to be more creative in solving issues like this. I know when I worked hourly, I would have preferred havimg time off the following week sometimes so that I could spend time with my family or whatever. I would have preffered the option but I know there would be some out there taking advantage one way or another.
Thanks again

There was legislation attempted a few years ago to allow employees the option of taking time off in lieu of overtime, but scare tactics by certain lobbyists defeated it.

"Scare tatics" aside, from a payroll prospective this could be a tough rule to implement. I generally have worked for employers with thousands of employees in many states with automated time accounting systems. There is mechanically very little time between receipt of the time accounting and the processing of the payroll to add an additional pay/defer step for overtime. Even in states with complex overtime rules such as CA, overtime and payroll calcuation is largely a fully automated process from time accounting to issuing payments. Adding a manual decision point from the employee mid way through the process has the potential (to me anyhow) to really jam up the works. Past that some states have their own overtime laws, not just the states with daily overtime. In many states even if an employee is not subject to overtime under the FLSA rules, the employee can still be subject to overtime in that particular state. A federal only change would not by itself make this change applicable in all states, which is one more problem for multi-state employers.

Having managed payroll for a large municipal government where comp time is allowed, the agency timekeepers took care of it. They did a "move" from OT to "Comp time earned at 1.5" before they signed off. Agreed that the time frame was rough sometimes, especially on holiday weeks; however, if the timekeepers did their job daily instead of waiting for the end of the pay period, it flowed pretty smoothly.

Scare tactic my aching back, look at the shenanigans employers do with P.T.O. now. The chamber of commerce wanted to put a kabash on the 40 hour work week. It was one of those things that sounds good like "right to work" which really means "right to be broke".
JoeC