Miscalculation Of Overtime Pay
An employer must pay its nonexempt employees 1.5 times the employee’s “regular rate of pay” for all hours worked over 40 in each workweek. Except in special circumstances (such as in some health care contexts), the employer may not average together multiple workweeks to avoid paying overtime. For example, if an employee works 45 hours one week and then 35 hours another week, the employee is owed 5 hours of overtime pay – the employee may not avoid overtime by claiming that the employee worked 40 hours per week on average for that biweek.
Many other issues arise with regard to the “regular rate of pay.” For example, sometimes employers pay employees on piece rates (i.e., per task completed or per project). Or an employer might pay an employee a flat rate for overtime hours worked to try to avoid paying time and a half. Regardless of the type of compensation, the employee still must be paid 1.5 times their regular hourly rate. The employer cannot avoid the overtime requirement by concocting complicated payment schemes.
The payment of day rates or salaries also presents complications. While it is not inherently illegal to pay nonexempt employees a salary or a day rate, the employer must also pay overtime compensation. Under federal law, if salaried employee works overtime, they are owed an additional 0.5 times their regular hourly rate (calculated as the division of the weekly salary by all hours worked that week) for all overtime hours worked. In some states (such as Pennsylvania), the employee is due an extra 1.5 times their regular hourly rate for all overtime hours worked.