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How to Calculate Overtime Pay Under the FLSA (It is More Complicated than You Might Think)


Federal overtime regulations are contained within the Fair Labor Standards Act (FLSA). As explained by the DOL’s Wage and Hour Division, the FLSA requires employers to pay all non-exempt employees overtime wages when they work more than 40 hours in a week. This raises an important question: How is overtime pay calculated?

While most employers and employees have an understanding of the basics, calculating overtime pay can be more complicated than many people realize. Below, our West Palm Beach employment law attorneys explain the three most important things you need to know about how overtime wages are calculated under the FLSA.

  1. The Basis: Time-and-a-half (1.5X) Standard Pay

Here is what you probably already know: Overtime pay is time-and-a-half (1.5X) a worker’s regular wage. Indeed, this is the foundation of overtime pay under federal law. An employee’s standard/regular wage is often referred to as ‘straight time’ pay. As a simple example, a Florida employee who earns $20 per hour in standard pay is entitled to an overtime wage of $30 per hour. 

  1. Straight Time Pay Might Be Higher than You Think

To calculate overtime pay, you need to know an employee’s straight time pay. Under the FLSA, straight time rate of pay includes an employee’s hourly wage and the value of nondiscretionary bonuses and other similar forms of compensation. This is where many Florida employers have run into problems in the past. Straight time pay may actually be higher than an employee’s hourly wage.

All other additional forms of compensation should be considered—some, but not all, of those other types of compensation must be included when calculating overtime wages. There is a wide body of law regarding what types of compensation should be included when determining straight time pay. If you are an employer or employee with specific questions about overtime pay calculations, an experienced Florida wage and hour lawyer can help. 

  1. Record Keeping Matters: All Hours Must Be Recorded Accurately

Finally, the importance of comprehensive record keeping must be emphasized. Employers have a legal obligation to accurately record the hours of all non-exempt employees. Without proper record keeping, it is impossible to know when an employee should start earning overtime pay. Companies cannot simply make rough guesses.

As soon as an employee hits the 40 hour threshold for a given week, the next minute that they work should be compensated at an overtime rate of pay. If an employer is systematically undercounting the hours of employees, they may face legal liability through an unpaid overtime claim.  

Call Our South Florida Overtime Pay Lawyers for Immediate Assistance

At Pike & Lustig, LLP, our Florida FLSA attorneys represent employers and employees in the full range of wage and hour claims. If you have questions or concerns about calculating overtime pay, we have answers. For a completely confidential consultation, please call us at our West Palm Beach office or our Miami office.




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