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Computing Overtime Pay
Overtime must be paid at a rate of at least one and one-half
times the employee's regular rate of pay for each hour worked
in a workweek in excess of the maximum allowable in a given
type of employment. Generally, the regular rate includes all
payments made by the employer to or on behalf of the employee
(except for certain statutory exclusions). The following examples
are based on a maximum 40-hour workweek.
? Hourly rate -- (regular pay rate for an employee paid by the
hour). If more than 40 hours are worked, at least one and one-half
times the regular rate for each hour over 40 is due.
Example: An employee paid $8.00 an hour works 44 hours in a
workweek. The employee is entitled to at least one and one-half
times $8.00, or $12.00, for each hour over 40. Pay for the week
would be $320 for the first 40 hours, plus $48.00 for the four
hours of overtime--a total of $368.00.
? Piece rate -- The regular rate of pay for an employee paid
on a piecework basis is obtained by dividing the total weekly
earnings by the total number of hours worked in that week. The
employee is entitled to an additional one-half times this regular
rate for each hour over 40, plus the full piecework earnings.
Example: An employee paid on a piecework basis works 45 hours
in a week and earns $315. The regular rate of pay for that week
is $315 divided by 45, or $7.00 an hour. In addition to the
straight-time pay, the employee is also entitled to $3.50 (half
the regular rate) for each hour over 40 -- an additional $17.50
for the 5 overtime hours -- for a total of $332.50.
Another way to compensate pieceworkers for overtime, if agreed
to before the work is performed, is to pay one and one-half
times the piece rate for each piece produced during the overtime
hours. The piece rate must be the one actually paid during nonovertime
hours and must be enough to yield at least the minimum wage
per hour.
? Salary -- the regular rate for an employee paid a salary for
a regular or specified number of hours a week is obtained by
dividing the salary by the number of hours for which the salary
is intended to compensate.
If, under the employment agreement, a salary sufficient to meet
the minimum wage requirement in every workweek is paid as straight
time for whatever number of hours are worked in a workweek,
the regular rate is obtained by dividing the salary by the number
of hours worked each week. To illustrate, suppose an employee's
hours of work vary each week and the agreement with the employer
is that the employee will be paid $420 a week for whatever number
of hours of work are required. Under this agreement, the regular
rate will vary in overtime weeks. If the employee works 50 hours,
the regular rate is $8.40 ($420 divided by 50 hours). In addition
to the salary, half the regular rate, or $4.20 is due for each
of the 10 overtime hours, for a total of $462 for the week.
If the employee works 60 hours, the regular rate is $7.00 ($420
divided by 60 hours). In that case, an additional $3.50 is due
for each of the 20 overtime hours, for a total of $490 for the
week.
In no case may the regular rate be less than the minimum wage
required by FLSA.
If a salary is paid on other than a weekly basis, the weekly
pay must be determined in order to compute the regular rate
and overtime pay. If the salary is for a half month, it must
be multiplied by 24 and the product divided by 52 weeks to get
the weekly equivalent. A monthly salary should be multiplied
by 12 and the product divided by 52.
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