Does Overtime Pay Only Count My Hourly Wages?

  1. EEOC-Employment Law
  2. Does Overtime Pay Only Count My Hourly Wages?
overtime pay calculation

The Fair Labor Standards Act (FLSA) establishes guidelines for how an employee must be compensated. Overtime pay rules and methods of calculation are included in FLSA guidelines. Hourly employees generally have no problem calculating overtime pay, but what if you receive pay for work not calculated by the hour? Does overtime pay only count hourly wages?

FLSA Overtime Basics

Employers who allow or require employees to work overtime are generally required to pay a premium for the number of hours worked over the regular amount. The FLSA specifies that a regular workweek is seven 24-hour consecutive periods totaling 168 hours. Unless exempted, employees working in excess of 40 hours in a single workweek must receive overtime pay. The overtime rate of pay is 1.5 times your regular rate of pay. For example, if you earn $20 per hour, your overtime rate should be $30 per hour ($20 x 1.5).

Here are some other important basics:

  • It is important to note that the FLSA regulations are based on a 168-hour workweek. Work on Saturdays, Sundays, holidays, or other regular rest days does not automatically require overtime pay.
  • The regular pay rate including tips or other remuneration cannot be less than the minimum wage.
  • The FLSA exempts some payments from being counted in your normal pay rate, including discretionary bonuses, gifts and payments in the nature of gifts on special occasions, and payments for occasional periods when no work is performed due to vacation, holidays, or illness.

Overtime for Non-Hourly Workers

Not all employees covered by the FLSA are paid an hourly wage, so some overtime pay calculations can be complex. Some employees are paid a salary, commission, or on a piece-rate basis. In all such cases, the overtime pay due must be computed on the basis of the average hourly rate derived from such earnings. This is calculated by dividing the total pay for employment in any workweek by the total number of hours actually worked. However, regardless of the way an employee is paid, their regular rate cannot be less than the minimum wage. If that occurs, the employee’s pay must be adjusted to receive at least minimum wage for all hours worked.

Here are some examples:

Paid by the day or job: Calculate the total compensation for the week and divide by the actual number of hours worked. A job paying $150 per day where the employee works 10 hours per day for five days would equal $750 for working 50 hours. The regular rate would be $15 per hour and the employee would be entitled to an overtime pay rate of $22.50 per hour for the 10 hours worked over 40. Their total pay should be $825 ($15 x 40 hours = $600; $22.50 x 10 overtime hours = $225; total pay = $825).

Non-exempt salaried employees: Calculate the regular rate by dividing the weekly rate by the total hours worked. A salaried employee earning $1,000 per week who works 50 hours that week makes a regular rate of $20 per hour. The overtime rate of 1.5 times the regular rate is $30 per hour. Their total pay should be $1,100 for the week ($20 x 40 hours = $800; $30 x 10 overtime hours = $300; total pay = $1,100).

Help with Complex Overtime Pay Situations

Many other non-hourly pay situations can create complex calculations. If you receive tips as part of your pay, they can be included in your overtime pay calculations. Some employees may also receive different rates of pay for different tasks performed for the same employer. Determining your overtime pay rate and calculating any overtime hours can become overwhelming. Even an honest employer can make mistakes and you could end up not receiving the overtime pay you have earned.

The Crone Law Firm focuses exclusively on employment law matters like overtime pay in Tennessee, Arkansas, Missouri, Illinois, Kansas, and the Southeast. We can review your pay records to determine if you have been cheated out of earned overtime pay. Contact our offices in Memphis, TN, St. Louis, MO, or Olympia Fields, IL, to get the seasoned help you need. Call or message us today for a free case evaluation.

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