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Overtime Calculation

How to Calculate Overtime Under the Fair Labor Standards Act (FLSA)

The Fair Labor Standards Act (FLSA) requires that overtime (OT) must be paid at a rate of 11/2 times a covered (nonexempt) employee's regular rate of pay for each hour worked in excess of 40 hours in a workweek (or the maximum allowable in a given type of employment). The FLSA does not require that overtime be paid to employees who are exempt or for hours worked in excess of 8 hours per day or on weekends or holidays.

In general, overtime for employees not paid a straight hourly wage is figured by converting to an hourly rate as follows:

Salaried with fixed 40-hour week.

The overtime rate is 11/2 times the rate per hour (weekly salary divided by 40) for all hours over 40 hours per week.

Salaried with fixed week of fewer than 40 hours.

The overtime rate is 11/2 times the rate per hour (weekly salary divided by number of hours that the salary is intended to compensate) for all hours over 40 hours per week.

Salaried with irregular week.

Employees who are paid a salary and whose hours vary from week to week receive an overtime premium calculated as follows: For each hour worked over 40, add one-half the rate per hour for that week. The rate per hour is the weekly salary divided by the actual number of hours worked in the workweek. For example, a $400-per-week employee earns $8 per hour in a 50-hour week. Half this amount, $4, is the overtime premium per hour. With 10 hours of overtime, the employee receives $40 in overtime pay in addition to his or her salary.

Semimonthly salaries.

The salary is multiplied by 24 and divided by 52 to obtain a weekly rate.

Monthly salaries.

The salary is multiplied by 12 and divided by 52 to obtain a weekly rate.

Job or day rate.

If the employee is paid a flat sum for a day's work or for doing a particular job without regard to the number of hours worked, and if he or she receives no other form of compensation for services, his or her regular rate is determined by totaling all the sums received at such day rates or job rates in the workweek and dividing by the total hours actually worked. The employee is then entitled to extra half-time pay at this rate for all hours worked in excess of 40 in the workweek.

Piecework.

When an employee is employed on a piece-rate basis, his or her regular hourly rate of pay is computed by adding together his or her total earnings for the workweek and dividing by the number of hours worked in the week. For overtime work, the pieceworker is entitled to extra half-time pay at this rate for all hours worked in excess of 40 in the workweek.

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