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How to Calculate Overtime Pay

As an employee you likely know that you are entitled to overtime pay under certain conditions. Unfortunately, most workers don’t have a firm grasp of how to calculate overtime pay. A Florida overtime attorney with our firm can help you calculate what you may be owed, but it’s usually a simple process. As a result of not knowing how to calculate what you may be owed, employees frequently lose out on pay to which they are legally entitled if the employer calculates pay incorrectly, either unintentionally or intentionally.

In the United States, the Fair Labor Standards Act, or FLSA, governs many aspects of the employer – employee relationship, including minimum pay rates. The FLSA requires most employees to be paid an hourly rate equal to at least the federal minimum wage. In addition, the FLSA requires employers to compensate employees at the rate of one and one-half the employee’s regular hourly rate for overtime. Overtime is defined as any hours worked over the employee’s regular 40 hour work week. Although this sounds simple enough, there are numerous exceptions, exemptions and special circumstances that can make calculating overtime pay much more complicated than it sounds like it should be.

First, to be legally entitled to overtime pay you must be a covered, nonexempt employee. In addition, if you qualify under an exemption your employer is not required to pay overtime. Some common exemptions include:

  • Certain drivers, loaders, and mechanics in the transportation industry
  • Commissioned sales people
  • Farmworkers
  • Computer professionals
  • Executive, professional and administrative employees
  • Employees at a seasonal or recreational business

Assuming that you are a covered, non-exempt employee and that you do not fall into an exception to the FLSA overtime requirements, computing your overtime pay begins with defining some important terms.

First, the “regular rate” is determined by taking the total amount you were paid for the week and dividing that by the actual number of hours worked. “Straight time pay” refers to the amount you earned before adding in the overtime pay. The “hours worked” includes all time an employee is required to be on the employer’s premises or at  any other prescribed place of work. A “workweek” is a fixed and regularly recurring period of 168 hours, or seven consecutive 24-hour periods. The workweek can begin on any day of the week.

To calculate your overtime pay you must first determine your regular rate. Let’s assume your workweek begins on Monday at 12:01 a.m. and ends on Sunday at 12:00 a.m., providing the required 168 period. Assume that you worked 45 hours during that period of time. You made $450 of straight time pay, making your regular rate $10.00 per hour ($450/45 = 10). To calculate the overtime pay you multiply the regular rate x 0.5x# hours worked over 40. In this case, the calculations are 10.00 x 0.5 x 5 = $25.00. You are entitled to $25 in overtime pay, making your total earning for the week, including the overtime pay, $475 ($450 + $25 = $475).

Because the FLSA laws can be confusing, if you are concerned that your employer is not paying you what you are entitled to in overtime pay you should consult with an experienced Florida employment attorney as soon as possible.