How is Overtime Calculated Under the FLSA?

  1. Overtime
  2. How is Overtime Calculated Under the FLSA?
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The Fair Labor Standards Act , or FLSA, was passed into law by Congress and signed by President Franklin D. Roosevelt in 1938. This was the first time that the term overtime was used on the national level.

The Fair Labor Standards Act has very specific rules on how overtime has to be calculated. Most of this is contained in Title 29, Part 778 of the Code of Federal Regulations.

Under the Fair Labor Standards Act, overtime pay is computed as 1.5 times your regular rate of pay for all hours worked above 40 hours in a workweek. This tells us three things:

  1. We calculate overtime pay in relation to a particular workweek
  2. The basic overtime threshold under the FLSA is 40 hours worked in a workweek
  3. The rate of pay for time worked above the overtime threshold is 1.5 times whatever regular rate you are paid.

So, for example:

Let’s assume you work in a factory and receive $10 per hour. You worked 50 hours last week. This would mean that you worked 40 hours in that workweek and reached the overtime threshold limit, plus 10 hours overtime. Here’s how your overtime pay would be calculated:

  • Your regular rate of pay: $10/hour
  • You regular gross pay: $10 x 40 hours = $400
  • Your overtime pay: ($10 x 1.5) x 10 hour = $150

When you calculate overtime pay, you typically do not include ‘special hours’, such as holidays, vacation time, sick leave, or time off unless the business does this regularly or has a personnel policy or union contract requiring that these hours be included. Overtime pay is customarily based only on the number of hours you actually worked.

For instance:

Let’s assume this time that you are paid $12.50 per hour and typically work 8 hours per day,  Monday through Friday. Last week you had Monday off for Memorial Day. You then worked 36 hours from Tuesday to Friday.

In this case, you might be inclined to believe that you are owed 4 hours overtime because if you add the 8 hours of holiday to the 36 hours you worked, it comes to a total of 44 hours for last week.

However, you are not entitled to overtime because you actually only worked 36 hours, which is below the overtime threshold of 40 hours per week.

If you are entitled to holiday pay, you will be paid at your regular rate of pay for the 8 hours you were off on Monday. But, you will not be paid overtime.

So, the total amount you will be paid for that week is  (8 hrs + 36 hrs) x $12.50 = $550

The FLSA does not limit to the number of hours you can work in any workweek, as long as you are compensated in accordance with the FLSA requirements.

With regards to state overtime regulations, some employees may be exempt from FLSA overtime requirements, but may still be subject to state overtime regulations which entitle them to be paid overtime at a rate of 1.5 times their regular rate of pay.

In addition, while most state laws are modeled on the FLSA, the state in which you work may require overtime to be calculated in a different way and/or may require some ‘special hours’ to be included when calculating the number of total hours worked in a workweek. Check with a local employment law attorney to find out.

Contact an Experienced Employment Law Attorney

For help recovering overtime pay, contact an experienced employment law attorney to review your case. Most attorneys offer a free initial consultation and handle employment law cases on a contingency fee basis, meaning that you will not owe them anything until and unless an award is obtained on your behalf.

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