Know How to Calculate Your Overtime Rate

Posted on Wednesday September 02, 2020

Knowing your proper overtime rate can be more complicated than it might seem. Employers make mistakes and deny employees their proper overtime pay, and employees should seek help from a California overtime lawyer who can protect their rights. 

Millions of employees across the United States – many of whom are in California – are considered to be nonexempt employees, which means that they are entitled to overtime pay under the California Labor Code and the Fair Labor Standards Act (FLSA). However, knowing that you should receive overtime rates and ensuring that you receive the proper amount you deserve are two different matters. If you believe that you have been denied overtime pay, you should not wait to speak with a California overtime lawyer who can assess your rights and options.

Your Regular Rate of Pay

Generally speaking, your overtime rate should be 1.5 times your regular rate of pay for work exceeding eight hours per day or 40 hours per week. You might assume that determining your overtime rate should be a fairly straightforward calculation, though it can be complicated for many California employees. The regular rate of pay might include hourly wages, salary, bonuses, commission, piece rates, and more. The following are some examples of how to calculate your overtime rate. 

Hourly employees – Many people receive hourly compensation for their work, and this is often the simplest situation in which to calculate your overtime rate. For instance, if you earn $20 per hour, you can multiply that rate by 1.5, so your overtime rate should be $30 per hour. If you receive two different rates for different types of work, you would base your calculation on the weighted average of the two rates. 

Nonexempt salaried employees – Many salaried employees are still nonexempt and entitled to overtime pay. If you have a fixed salary per month, you will need to determine how that breaks down to hourly rates. For instance:

• Your monthly salary is $3,200
• Multiply by the monthly amount by 12 ($38,400)
• Divide that amount by 52 weeks ($738.46)
• Divide the weekly amount by 40 hours ($18.46)
• Multiply the regular hourly rate by 1.5 ($27.69)

Commission or piece-rate employees – Some employers compensate employees by the piece of work completed or another type of commission. In this situation, you should determine how much you were paid for your regular work during a week, and divide that amount by 40 hours. This is the regular rate of pay used to calculate the 1.5 overtime rate. There are other acceptable methods of calculating overtime in these cases, including using a group rate for piece workers. 

Discuss Concerns with Our California Overtime Lawyers

Some employers make errors when calculating overtime rates, and employees miss out on compensation that they deserve under California and federal law. Employees might not realize the mistake for some time, after which they are owed considerable back pay. An experienced California overtime lawyer at Mara Law Firm can identify when your wage rights have been violated and take proper action on your behalf. Call (619) 234-2833 or contact us online to discuss a possible case.