Employment Law -- Employee
For Purposes Of Calculating Overtime, How Is The
If the employee is paid on an hourly basis, that amount is the regular rate. The regular rate may not be less than the minimum wage. If the employee is paid a salary, based on a 40hour workweek, the regular rate is determined as follows:
- Multiply the monthly salary by 12 to get the annual salary.
- Divide the annual salary by 52 to get the weekly salary.
- Divide the weekly salary by 40 to get the regular rate.
The result is the rate used to compute overtime. Payroll records must reflect overtime pay of 1 1/2 times that rate for hours over 40 in a workweek.