average hourly wage

sandra_d

I know how to calculate the average hourly wage for nonexempt staff for the purposes of determining the correct overtime rate of pay in "normal" work weeks. My question is (and I'm having a hard time putting it into words - I hope you can understand what I am asking): we pay double time for those who work a holiday, so does that "doubled time" count for that work week when calculating the average hourly wage - in effect making the average hourly wage higher simply because the person worked that holiday?

An example to try and clarify:
An employee works 40 hours per week earning $10 per hour. If they receive double time for 8 of those hours, the average hourly wage is now $12 ($10 x 32 plus $20 x 8 = $480 / 40 = $12/hr) rather than $10. When the additional pay is given as a benefit (like holiday pay) does that extra money need to be included in the calculation of an overtime rate?

I'm guessing it does, but thought I'd see if anyone knows for sure. Thanks for any words of wisdom you may offer!

Nat

It is my understanding that any "wages for worked hours" must be used in the calculation of overtime pay. You are able to eliminate hours paid for non-worked hours such as vacation, sick, or holiday (if they don't work on the holiday) or PTO if you have that. Probably not the answer you wanted to hear. You might want to check with the local Wage and Hour office. I find them to be very helpful when I have technical questions. You can call them anonymously.

Hatchetman

[font size="1" color="#FF0000"]LAST EDITED ON 02-26-03 AT 01:03PM (CST)[/font][p]Take a look at FLSA regulations regarding caluclating the "regular" rate of pay...29CFR778. The particular issue is addressed in 778.200(a)(6). Since you are paying double the employee's rate of pay for the holiday worked, if overtime is worked that week (beyond the 40 hours), you don't have to take the double rate into the calculation, since it is at least time and a half.

And of course, that extra premium holiday rate may be treated as payment of the overtime. Take a look at 778.203 and .205 which are dupicate provisions as well.

The link to the regulation is [url]http://www.access.gpo.gov/nara/cfr/waisidx_98/29cfr778_98.html[/url]

Should note that, of course, your state law may provide for a better "benefit" to the employee than the FLSA regulation provides.