The regular rate: why your overtime rate may be higher than you think
Key points
- Overtime is 1.5 times your regular rate, not just your base wage.
- Production, attendance and safety bonuses usually must be included.
- Truly discretionary gifts, like a surprise holiday bonus, generally are not.
What goes into the regular rate
The regular rate is generally all pay for employment in the workweek divided by total hours worked, minus certain excluded payments. Commonly included:
- Non-discretionary bonuses: production, attendance, safety, retention and incentive bonuses promised in advance
- Shift differentials and hazard pay
- Commissions
- On-call pay for hours worked
Commonly excluded: true gifts, discretionary bonuses the employer decides on at the end with no prior promise, expense reimbursements, and premium pay already paid at overtime rates.
Worked example
| Item | Amount |
|---|---|
| Base pay: 48 hours × $20 | $960 |
| Weekly production bonus | $96 |
| Total straight-time pay | $1,056 |
| Regular rate: $1,056 ÷ 48 hours | $22.00 |
| Overtime premium owed: 8 hrs × $11 (half of $22) | $88 |
| Total pay owed for the week | $1,144 |
If the employer simply paid 8 overtime hours at $30 (1.5 × $20) on top of 40 at $20 plus the bonus, you'd receive $1,136, which is $8 short that week. Over 100 weeks, that's $800.
Two jobs at the same employer
If you work two different rates for the same employer, your hours are combined for the week, and the overtime rate is generally based on a weighted average of the rates (or another method the law allows by agreement).
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