Little Known Facts about Overtime

According to § 778.419 (see section below), if your hourly employee is performing two or more different jobs during the week and is paid different amounts for each job AND the employee works overtime hours during that 7-day workweek, the employee can agree that the overtime premium can be 1.5 times the hourly rate of the job that was being performed when the overtime hours were being worked. This is different than using the “weighted average” methodology to calculate the base rate.

Examples of when this might happen:

An hourly employee works in Dept. A at $10/hour for part of the week and works in Dept. B at $12/hour for part of the week. If the employee works 30 hours in Dept. A during the first part of the week and then works an additional 20 hours that week in Dept. B for a total of 50 hours that week, the 10 hours over overtime premium would be calculated using a base rate of $12/hour. In other words the employee would receive overtime pay of $18/hour for the 10 hours of overtime he/she worked in Dept. B.
An hourly employee is traveling for the company and the company decides to pay the traveling employee minimum wage during the travel time. If this employee works overtime during the week, overtime can be calculated based on the wage the employee was earning when the overtime hours were being worked.
An hourly employee is “on-call” and the company has instructed the employee that if there is an emergency, he/she must respond to the emergency “within 30 minutes”. If an employer has created an environment where the employee cannot go about his/her normal activities, the employee has now been “engaged to work”, meaning that the hours spent “on-call” now become compensable at not less than minimum wage and these hours must also count as hours worked for purposes of calculating overtime. So, if the employee was working overtime during the “on-call” time and was being paid minimum wage, the overtime premium could be paid at 1.5 times the minimum wage amount.

§ 778.419

(a) Under section 7(g)(2) an employee who performs two or more different kinds of work, for which different straight time hourly rates are established, may agree with his employer in advance of the performance of the work that he will be paid during overtime hours at a rate not less than one and one-half times the hourly nonovertime rate established for the type of work he is performing during such overtime hours. No additional overtime pay will be due under the act provided that the general requirements set forth in §778.417 are met and;
(1) The hourly rate upon which the overtime rate is based in a bona fide rate;

(2) The overtime hours for which the overtime rate is paid qualify as overtime hours under section 7(e) (5), (6), or (7); and

(3) The number of overtime hours for which the overtime rate is paid equals or exceeds the number of hours worked in excess of the applicable maximum hours standard.
(b) An hourly rate will be regarded as a bonafide rate for a particular kind of work it is equal to or greater than the applicable minimum rate therefor and if it is the rate actually paid for such work when performed during nonovertime hours.

Call with questions.

Thank you for reading!