Proper Calculation And Payment Of Overtime

In addition to illegally failing to pay overtime in the first place, many employers accidentally or intentionally fail to properly calculate or pay overtime for workers who are entitled to overtime.

One common employer violation occurs when employers try to calculate overtime entitlement based on an 8-hour day or 80-hour two-week pay period.  The standard rule is that overtime must be paid at a rate of time-and-a-half for every hour over forty that an employee works in a given week.

Employers cannot avoid overtime by working employees only seven or eight hours a day six days a week because overtime is usually determined on a weekly, not daily, basis.  Thus, if your employer requires you to work seven or eight hours a day for six out of seven days of the week, you are entitled to overtime because your total hours will be more than forty, even though you never worked more than eight hours in a single day.   Of course, there is a drawback to that general rule — you can be required to work without overtime as many hours in a single day which your employer desires as long as you do not exceed forty hours for that entire week.  Some employers have their workers on a four-day schedule and forty hours are crammed into those four days.  That’s a lot of work, but it’s not illegal because those employees do not exceed forty hours for the week.

Another frequent error happens when employers that pay on a bi-weekly basis try to avoid overtime by not having the employees exceed eighty hours for the entire two-week pay period.  That is also illegal because overtime is determined on a weekly basis, regardless of the employer’s pay schedule.  Employers violate the law by having employees work fifty hours one week and then thirty the next for a total of eighty during the two-week pay period without paying overtime.  The employer has to pay ten hours of overtime for the week in which the employee worked fifty hours even though only eighty hours were worked in the two-week pay period.

There is an exception to the above rules for certain classes of employees, such as hospital workers.  By prior written agreement employees in that special class can consent to an “8 and 80” arrangement, under which they are paid overtime if they exceed eight hours in a day or eighty hours in a two-week period.  But that possibility only exists for a narrow class of employees and has to be agreed to in advance or the standard forty- hour weekly determination rule governs.

Private employers also violate overtime law when they compensate employees for overtime through “comp time,” gifts, or other non-wage items.  Federal law only allows private employers to pay overtime in one form — 1.5 times the employee’s usual hourly rate (or equivalent if the employee is salaried or paid a set fee).  Payment in any other form is illegal.  Public employers are an exception to that rule and may compensate overtime through either the premium time-and-a-half rate or through “comp time.”

I can help you with any overtime law  questions that you might have.  Please feel free to contact me for a free initial consultation about employment law or labor law.