Overtime rate calculations

Our warehouse associates are non-exempt and governed by a collective bargaining agreement. The contract dictates the rate of pay they receive. Those associates who work second shift also receive a pay differential. Per the contract, all Saturday work is paid at time-and-one-half of the regular rate (no differential). My question is, if the Saturday work entitles them to overtime as defined by wage and hour law,what hourly rate should be used to calculate the overtime.


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  • The regular rate of pay is calculated by dividing the employee’s total remuneration for a week’s work by the number of hours actually worked in that week. That includes shift premiums for working holidays or weekends. Adding in the shift differential increases the employee’s regular rate and, consequently, the amount of overtime owed to the employee.

    Here’s a step-by-step explanation of what to do:
    1 – Calculate the employee’s pay for the week in question, including the shift premium for weekend hours.
    2 – Divide that figure by the number of hours the employee actually worked that week to get the employee’s regular rate of pay.
    3 – Divide the employee’s regular rate of pay by 2 to get the employee’s overtime rate.
    4– Calculate overtime owed by multiplying the employee’s overtime rate by the number of overtime hours worked that week.

    Hope this helps!

    Julie Athey
    Senior Attorney Editor
    M. Lee Smith Publishers
    Author, “Defusing the Overtime Bomb: How to Comply with the FLSA”

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