Introduction to the Fair Labor Standards Act (FLSA)

B. C ALCULATION OF THE R EGULAR R ATE Because overtime must be computed on the basis of the hourly rate, the first step is to determine the employee’s hourly base rate of pay. If the salary schedule or MOU designates an hourly base rate for the employee, no calculations are needed to determine the hourly base rate of pay. For those agencies that have pay plans or a salary schedule that establishes weekly, bi-weekly, monthly or yearly wage amounts, these salary amounts must be converted to an hourly base rate of pay prior to calculating the hourly regular rate of pay. 183 Once the hourly base rate of pay is determined, then the regular rate of pay for purposes of calculating overtime is determined by dividing the employee’s total remuneration for employment in any workweek or work period (excepting exclusions listed in the FLSA) by the total number of hours actually worked by the employee in the workweek or work period. 184 The following is a relatively basic example of calculating the regular rate for an employee that earns $20.00 per hour, works 44 hours in the seven-day workweek, and receives an includable production bonus of $55 for the week’s work. The regular rate calculation is:

Total remuneration for the week: 44 x $20 = $880 + $55 = $935.00

Divided by total hours worked: 935/44 = $21.25

The employee’s regular rate = $21.25

The below demonstrates how to calculate the employee’s total compensation, including FLSA overtime, for the week:

44 x $20 + $55 = $935.00 x $21.25 x 1/2 = $ 42.50 $977.50 or $935.00 4 x $21.25 x 1/2 = $42.50 $977.50 or $850.00 4 x $21.25 x 1 1/2 =$127.50 $977.50 44 x $21.25 = 40 x $21.25 =

Mathematically, all three calculations result in the employee receiving $977.50 in total compensation for the workweek. This illustrates that there are multiple ways that FLSA overtime can be calculated. The first two methods may be referred to as the “half-time method.” The third method may be referred to as the “one-and-a-half method.”

Introduction to the Fair Labor Standards Act (FLSA) ©2020 (s) Liebert Cassidy Whitmore 37