Overview: When an employee is paid just a single hourly rate, overtime laws make it easy enough to calculate overtime. But things get a little more complicated when different employment arrangements are involved.
For example, employers must take special care when calculating how much overtime nonexempt employees are entitled to if they are paid pay bonuses, day rates, salaries, piece rates, or on-call pay.
Also, employees who work at two or more different types of work for which different rates have been established must be paid a weighted average of those two rates.
Trends: More and more employers are outsourcing payroll or using HRIS systems that automate the calculation of overtime. It's important for HR to familiarize itself with different types of overtime, so it can spot any potential trouble spots that a third party payroll provider or software system might overlook.
Author: Michael Cardman, Legal Editor
Updated to reflect an amendment to the daily overtime requirements, effective August 8, 2017.
Updated to reflect forthcoming local overtime requirements under the New York City Fair Work Practices ordinances.
Updated to reflect new quasi-overtime requirements under the Seattle Secure Scheduling Ordinance, effective July 1, 2017.
Compensation already paid for hours of work may not be used as an offset and thereby be counted a second time as statutorily required compensation for other hours of work, the 3rd US Circuit Court of Appeals held in Smiley v. E.I. Dupont De Nemours & Co.
In Flores v. City of San Gabriel, the 9th Circuit Court of Appeals held that payments of cash in lieu of benefits must be included in the regular rate when calculating how much overtime employees are owed under the Fair Labor Standards Act (FLSA).
In-depth review of the spectrum of Maryland employment law requirements HR must follow with respect to overtime.
In-depth review of the spectrum of Michigan employment law requirements HR must follow in respect to overtime.
In-depth review of the spectrum of Alaska employment law requirements HR must follow with respect to overtime.
HR guidance on legally computing employee overtime.