Computing Overtime Pay
The law requires overtime to 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 40 hours worked. 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 $5.15 an hour works 44 hours in a workweek. The employee is entitled to at least one and one-half times $5.15, or $7.73, for each hour over 40. Pay for the week would be $206.00 for the first 40 hours, plus $30.92 for the four hours of overtime--a total of $236.92
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 the same 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 $207. The regular rate of pay for that week is $207 divided by 45, or $4.60 an hour. In addition to the straight-time pay, the employee is entitled to $2.30 (half the regular rate) for each hour over 40.
Up to 80% of workers are entitled to receive overtime pay.
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 non-overtime 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.
In no case may the regular rate be less than the minimum wage required by FLSA.