By Derrek Cummings on August 4th, 2018
Overtime refers to the time worked by an employee over 40 hours per week. According to The Fair Labor Standards Act (FLSA), most employees must be paid 1.5 times their regular working wage for any work above 40 hours per week. In some cases, however, employers must use a formula to calculate weighted overtime.
If you believe your employer is not paying you overtime owed and you would like legal advice and representation, contact Weisberg Cummings, P.C. to arrange a consultation with one of our attorneys.
What Is Weighted Overtime Pay?
Weighted overtime is also known as “blended” overtime. It is most often used in situations where an employee performs multiple types of jobs at one organization and gets paid different rates for each. Weighted average overtime uses a formula to get the average of a worker’s different pay rates so they can be paid for overtime without the employer having to calculate and add up the overtime pay for each rate separately.
Blended overtime can also be used in situations where an employee has overtime hours and also gets tips or commission as part of their pay.
The Overtime Calculation Method
Some payroll software will calculate weighted average overtime for employees automatically. There is also a way to calculate overtime manually:
- Start by multiplying the hours worked by each of the pay rates. Add the sums to get total compensation and divide this number by the hours worked to get the regular rate. This is the weighted average.
- Next, multiply the weighted average by 1.5. This is the overtime rate. Multiply the overtime rate by the number of hours the employee has worked overtime to get overtime earnings.
- Multiply the weighted average by 40 hours. This is the total straight time earnings. Add this number to the overtime earnings to get the amount to be paid for overtime.
Here is what this formula looks like in action:
Let’s say Jane works for $15 for half of her work duties (25 hours) and $20 for the other half. She has worked 50 hours, meaning she has 10 hours of overtime.
- (25 hours x $15) + (25 hours x $20) = $875
- $875 / 50 hours worked=$17.50 / hour
- Jane’s regular rate is $17.50 / hour
- $17.50 x 1.5 (the amount you multiply to get the overtime rate) = $26.25 / hour
- $26.25 / hour x 10 hours of overtime worked = $262.50
- $262.50 is Jane’s total overtime wages for this week.
- $17.50 x 40 hours in a full workweek = $700
- $700 is Jane’s total straight time earnings.
- $700 + $262.50 = $962.50
Jane’s total compensation for the week, using weighted overtime, is $962.50.
Is Your Employer Paying You Overtime?
If your employer is not paying you the overtime you are owed or if you feel there is something wrong with the way your overtime is calculated and you would like legal advice and representation, contact Weisberg Cummings, P.C. for a consultation with an employment law attorney. With more than 40 years of combined experience, our attorneys are poised to provide responsive and personalized legal representation to clients across Pennsylvania.