The federal Fair Labor Standards Act usually requires employers to compensate employees for overtime pay at a blended rate when the employee receives two or more different rates of pay for the same employer. A blended rate can apply to anyone who receives multiple rates of pay, such as a person who cuts hair and also works as a receptionist for the salon. This blended rate is computed by using a weighted average of the two rates of pay.
An employee can find his blended rate by multiplying the number of hours he worked at each rate by the rate of pay. For example, if a teacher's assistant works 10 hours each week in the cafeteria for $8 an hour and in the classroom for 30 hours each week at $10 an hour, the blended rate is $9.50. This is calculated by multiplying 10 times $8 and 30 times $10, adding the sums of both equations and dividing the total by 40 hours. Overtime pay is 1.5 for each hour over 40. If the teacher's assistant worked 10 additional hours, he would receive $9.50 for each extra hour, resulting in $95 before deductions.
- Cornell: 29 CFR 778.115 -- Employees Working at Two or More Rates
- Office of Personnel Management: Fact Sheet -- How to Compute FLSA Overtime Pay
- Law.com: Overtime Calculation for Employees Working at Multiple Rates
- Liebert Cassidy Whitmore: But They Said Their Payroll Program Complied With the FLSA...?
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