How it works
Under the federal Fair Labor Standards Act, non-exempt workers are generally owed at least one and a half times their regular rate for hours over 40 in a workweek. When someone works at two or more rates in the same week, the regular rate is usually the weighted average of all straight-time pay, sometimes called the blended rate.
- Straight pay = every hour at its own rate, added up.
- Regular rate = straight pay / total hours.
- Overtime premium = overtime hours x (multiplier - 1) x regular rate. Straight pay already covers the "1" part of time and a half, so only the extra half is added.
- Gross = straight pay + overtime premium.
With daily rules switched on, hours over the daily limit in a day are overtime, hours over the double-time limit are paid at twice the regular rate, and weekly overtime counts only the hours that were not already overtime that day, so no hour is paid as overtime twice.
Not modeled: bonuses and shift differentials that must be added to the regular rate, seventh-day rules, the "rate in effect" method that some agreements allow, and state minimum wage checks. Read Overtime for home care workers.