All pay calculations under the Fair Labor Standards Act (FLSA) are made on the basis of a workday and workweek. Regardless of whether you are paid on a daily, weekly, monthly or other basis, your pay and overtime must be calculated based on a workweek. To enforce overtime laws, the Department of Labor (DOL) furnishes methods of calculating a weekly wage regardless of the frequency with which you are paid.
A workweek consists of 168 hours, which represents seven days times 24 hours. Your employer can choose the start day of the workweek, and can assign different start days to different employees or groups. Employee coverage, wage payment requirements compliance, overtime pay calculations and the determination of most exemptions are based on the workweek. The workweek must occur regularly, must be fixed and must begin at the same time each week. The start time cannot be changed, once established, unless the change is expected to be permanent and complies with FLSA.
Workweek Overtime Requirements
Overtime must be paid at one-and-one-half the employees regular rate of pay, if they have worked more than eight hours in a day and 40 hours in the workweek. If you worked nine hours in a day, but only worked 38 hours in the week, you are not entitled to overtime pay.
Similarly, piece-rate employees are entitled to one-half over their regular rate of pay for overtime. Their regular rate of pay is calculated by dividing the total pay for a workweek by the total hours worked. Divide this result in half to determine the one-half pay rate for overtime. Alternatively, the rate for each piece can be divided by two, with the result added to the regular piece rate. This time-and-one-half piece rate is then used for the overtime piece rate calculation.
Calculations Using Workweeks
For a daily pay job, calculate the regular rate of pay by dividing the wages earned in a week by the total number of hours worked. Your overtime pay will be based on this calculation.
For a monthly pay job, multiply your monthly pay by 12 then divide it by 52 to get your weekly rate of pay. Semi-weekly pay is calculated by multiplying your semi-weekly pay by 24 then dividing it by 52.
Only compensated hours are included in the workweek calculation to determine if overtime is due an employee. For example, if you worked three eight-hour days, took one vacation day, then worked one 10 hour day, you would not be entitled to overtime because you only actually worked for 34 hours.
In addition, two weeks cannot be averaged together to determine the hours in your workweek. For example, if you worked 30 hours one week and 50 hours the next week, your average workweek would be 40 hours. By law, you should receive overtime pay for the second week because it exceeds 40 hours.