How is overtime calculated if I am paid a salary?

Hi, I’m Innessa Huot and I’m an employment attorney.

So, even if you’re paid a salary, you’re generally still entitled to overtime when you work more than 40 hours in a week. But the question is, if you’re paid a salary, how is this overtime calculated?

So, I’m going to give an example. Say you make $800 a week, but you’ve worked 41 hours. You should be paid overtime on that one hour. And the way to calculate is, you take $800 and you divide it by 40 because those are your regularly scheduled hours and then you get $20. So that’s your regular rate. Your overtime rate is one and a half times that. So, then for that one additional hour, you should be paid $30 an hour. Now, this gets complicated when you also get extra pay based on the number of items you produce.

So, let me give you another example, and I’m going to still use the $800 a week and the 41 hours that you’ve worked. But now let’s say you earned an additional $200, because you made 10 extra special boxes. So now what you have to do, you have to add that $200 so the $800, and you get $1,000. Then you have to divide that $1,000 by 40. And now you get $25. The overtime rate on that $25 is one and a half times, which is $37.50. So, now for that additional hour, you are to be paid $37.50 cents.

Now this is obviously pretty complicated, and it gets even more complicated when you have to factor in commissions and bonuses. Give us a call and we’d be happy to walk you through this and really determine whether you’re being paid correctly. Thank you so much for watching.