How Is Overtime Calculated?

Employees are often unaware of the technical details regarding the way that their minimum required overtime payments must be calculated. The bottom line is that an employee must be paid time and a half for every hour worked over forty hours in a workweek. This is true no matter how high her hourly rate may be. This also applies to salaried employees. If the specific hourly rate of a salaried employee was never discussed between the employee and the employer, then the weekly salary is divided by the agreed hours to be worked in a workweek. That calculation gives the hourly rate, and any extra hours over forty must be paid at time and a half based off that rate.

Employers will often confuse the concept of a salaried employee with the concept of an exempt employee. While salary is a factor in deciding whether an employee is exempt from overtime, it is only one factor, and the salary must usually be quite high (six figures). To be exempt the employee must also be doing a specific type of function, for example, she must be a lawyer or a doctor, or be doing some other job that requires many years of specialized training or education.

However, for jobs that are not exempt from overtime requirements, any salary, even a high salary, must be divided by forty to calculate the hourly rate, and excess hours worked are payable at an overtime rate. Often, employees do not realize that they are entitled to overtime, even if they are salaried. Employees who have questions about calculating the amounts that they must be paid and whether anything additional is owed should contact a lawyer to discuss this issue.