Kentucky Minimum Wage & Overtime Salary Requirements

Kentucky Minimum Wage & Overtime Salary Requirements

Navigating complex state and federal wage and hour laws can be especially challenging for small businesses, who have superstars wearing multiple hats rather than resources dedicated to payroll and employment law. Even minor payroll errors can not only be detrimental to employee engagement and retention, but risky and expensive should a complaint be filed.

What is the minimum wage in Kentucky?

Every employer must follow at least two minimum wage guidelines: the minimum wage set by federal law and the minimum wage set by state law. Organizations that have employees in multiple states must understand and comply with even more guidelines, taking the state in which the employee works into consideration when establishing the rate of pay.

As of September 2022, the federal and Kentucky minimum wage rate is $7.25 per hour. That means employers in Kentucky only have to be mindful of one number – while monitoring for change, of course. All Kentucky employees must be paid at least $7.25 per hour with an exception: the cities of Lexington and Lousiville have established a higher minimum wage of $8.20.

While many states establish a lower minimum wage rate for tipped employees, Kentucky references federal law here. That means tipped employees can be paid as little as $2.13 per hour so long as the employer can demonstrate that their combined cash and tips total the minimum wage for non-tipped employees ($7.25 per hour).

What is overtime pay?

When employees work more than a standard number of hours in a day or a week, federal and state law entitles them to a higher rate of pay to prevent employers from exploiting or overworking their employees – especially their lowest-paid employees.

According to federal law, this higher rate of pay takes effect when an employee works in excess of 40 hours in a work week and must be at least “time and a half” or 1.5 times the employee’s base rate. In some states, the rate is higher and kicks in sooner; after an employee has exceeded a certain number of hours in a single day, for example.

Kentucky matches federal law here, too. Kentucky employees are owed 1.5 times their regular rate of pay when they work more than 40 hours in any given work week.

Some employees are exempt from the provisions surrounding overtime pay under the Fair Labor Standards Act; you can learn more here.

Kentucky

How do you track overtime?

To ensure compliance, automate tracking and paying of overtime in your organization. When hourly employees clock in and out using a time clock, timekeeping, and payroll systems can automatically calculate their pay at the Kentucky overtime salary when they exceed 40 hours in a work week, preventing errors or omissions that are not only illegal but disengaging for your employees.

ASAP Payroll offers a variety of full-service solutions for ensuring compliance with Kentucky minimum wage and overtime guidelines; request a free quote to take the first step toward automation today. We can’t wait to show how we can help.

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