Overtime Pay (2024)

FAQs

Overtime Pay? ›

Regardless of how you are paid, you are entitled to be paid time-and-a-half for your overtime hours each week in which you work more than 40 hours unless you fall into an exempt category. Otherwise, companies would be able to avoid paying its employees overtime just by paying them a salary instead of by the hour.

The standard overtime rate is 1.5 times the employee's regular hourly wage. This number is also commonly known as “time-and-a-half.” So if one employee makes $15 per hour, their overtime rate is $22.50 per hour ($15 x 1.5). If another employee makes $25 per hour, their overtime rate is $37.50 per hour ($25 x 1.5).

Under the FLSA, overtime pay is determined by multiplying the employee's “straight time rate of pay” by all overtime hours worked PLUS one-half of the employee's “hourly regular rate of pay” times all overtime hours worked. All overtime work that is ordered or approved must be compensated.

Beginning July 1, 2024, the new DOL rule increases the salary threshold, making millions of previously exempt employees nonexempt from overtime pay. The new overtime rule increases the FLSA salary threshold to $43,888 annually ($844 per week), up from $35,568 ($684 per week).

$20 per hour times 40 hours per week equals $800 of earnings per week on average. Multiply her hourly wage by 1.5 to determine her hourly rate when working overtime. $20 per hour times 1.5 equals $30 per overtime hour.

Overtime is when you pay your employees 1.5 times their normal rate, while double time is when you pay your employees twice their normal rate. For instance, if an employee regularly earns $17, their overtime rate is $25.5 per hour, while their double time rate is $34 per hour.

The employees' regular rate of pay would be $10 an hour. Under half-time, the employee would be entitled to one-half the $10 regular rate for all overtime hours worked. Thus the employee would be entitled to $5 an hour multiplied by the 10 hours of overtime worked, or $50 in extra overtime pay.

The most usual rate for overtime hours is time and a half, and that is 50% more than the employee's standard wage. It means that for every hour of overtime, you receive an equivalent of 1.5 the regular hourly rate.

According to the Bureau of Labor Statistics, the median hourly wage in the United States is around $22 per hour for all workers. So, comparatively, $18 an hour could be considered lower than average by that particular data set, but again it depends on your personal circ*mstances and where you live/work.

Calculate the daily ordinary pay rate by dividing the employee's monthly wage by 26. Divide the ordinary pay rate by the number of regular work hours to determine the hourly pay rate. Calculate overtime pay: multiply the hourly rate by 1.5, then multiply the sum by the overtime hours.

How is overtime worked? ›

An overtime rate is higher than an ordinary rate, and may differ depending on the number of hours and time or day worked. An overtime rate is often 150% ('time and a half') or 200% ('double time') of an employee's ordinary hourly rate of pay.

Under federal rules, time-and-a-half overtime rates apply when a nonexempt employee works more than 40 hours in a single workweek. Individual states, however, may have different overtime requirements. For instance, overtime may accrue by the workday rather than the workweek or double-time rates may apply.

Recently, the US Department of Labor (DOL) released their final rule, updating the Fair Labor Standards Act (FLSA)'s overtime pay requirements. The rule increases the minimum salary threshold to $43,888 on July 1, 2024, and then to $58,656 on January 1, 2025.

If there is still no winner at the end of a fourth overtime period, there will be another coin toss, and play will continue until a winner is declared.

Are there maximum or minimum salaried hour requirements? There are no maximum or minimum hour requirements for salaried employees. If an employee works more than 40 hours, their pay will not reflect overtime hours. Likewise, if an employee works fewer than 40 hours, an employer can't reduce their pay.

For example, if Jess is typically paid $15 per hour, that means she makes $22.50 per hour with time and a half ($15 × 1.5).

How much is time and a half? Time and a half pay is 50% more than an employee's regular rate of pay. For every hour of overtime an employee works, you must give them their regular rate of pay plus half of that. To calculate an employee's overtime rate of pay, multiply their regular rate by 1.5.

Assume an employee earns $20 hourly during a 40-hour work week. Their time and a half pay would be $20 x 1.5 for a total of $30 an hour.