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How Is Overtime Pay Calculated For Flat Rate Employees?

On Behalf of | Jan 21, 2014 | Wage: Overtime |

Overtime Attorney’s and Wage Lawyer’s best, top answers: Am I entitled to overtime pay at time and a half? How do I calculate my overtime? Can salaried employees get paid overtime?

Employment, Lawyer, attorney, law firm, Ohio, Cleveland, employer, employee, overtime, time and a half, wages, Fair Labor Standards Act, FLSA, wage and hour, misclassified, best, top, Ohio Fair Labor Standards Act, Brian Spitz, my job, my paycheck, I, pay, exempt, non-exempt, salary, salariedCan two salaried employees who earn the same salary and work the same number of hours in a given week be entitled to different amounts of overtime compensation? Yes, depending upon how your employer determines your regular rate when calculating your overtime compensation.

Normally, as a salaried employee, an employee is paid a fixed amount each week, regardless of the number of hours worked that week. Exempt employees are not entitled to overtime while non-exempt employees – even if paid a salary must be paid overtime as a matter of law. (Am I a no-exempt employee? Click here to find out.)(But, I work in IT … can I get overtime? Click here.)

When determining how much overtime compensation a non-exempt employee has earned, first, the employer has to determine what the applicable hourly rate would be for that employee. The employer can use one of two different formulas and it depends on the understanding between the employee and employer as to how many hours the employee is expected to work.

Cleveland, Ohio, exempt, non-exempt, Employment, attorney, Lawyer, Brian Spitz, law firm, employer, employee, overtime, time and a half, wages, wage and hourWhat if an employee has the understanding that his/her salary is based on a 40-hour work week? If this is true and employer cannot prove otherwise, then the formula provided in Code of Federal Regulation 778.113 applies. Under this provision, the employee’s “regular rate” for purposes of calculating overtime pay is simply based a normal 40-hour workweek. For example, if an employee makes $500 as a weekly salary, her hourly “regular rate” would be $12.50 ($500/40 hours). If the same employee worked 50 hours during her work week, she would be entitled to $187.50 in overtime compensation for that week (12.50 x 1.5 x 10 hours). Simple enough right?

Now, what if an employee has the “clear mutual understanding” with her employer that her salary is not based on any set number of hours, but rather that she is to be paid the same amount regardless of the number of hours worked? Well, in that case, the employer may be able to apply the Fluctuating Work Week Formula and limit the employee’s overtime compensation amount. Here’s how it works with the same example. Again, let’s say the employee earns a salary of $500 per week and works 50 hours in a particular week. Under the FWW formula, to get the applicable hourly “regular rate,” the employee’s salary ($500) is divided by the total hours worked, even if that number is more than 40 hours. Here, the regular rate would be $10.00 per hour (500/50). Then, under the FWW formula, the regular rate is divided in half and then multiplied by the total number of overtime hours to get the final value that is owed as overtime compensation. Here, that would be $5.00 x 10 hours to equal $50.00.

So let’s compare. Two employees, same salary, same hours worked, but one is entitled to $187.50 in overtime pay while the other gets $50.00. Doesn’t seem fair right? Nevertheless, under the Fair Labor Standards Act, each of these formulas is a legal way for employers to calculate their employees’ overtime compensation, although the FWW formula may only be applied by the employer if in fact the employee possesses that “clear mutual understanding” that his/her salary is not based on any set number of hours.

If you any questions about the Fair Labor Standards Act or think you may have a claim for unpaid overtime compensation against your current or former employer, call the employment attorneys at Spitz, The Employee’s Law Firm for a free consultation today.  If you believe that your employer is not paying you all of your wages for all of your lawfully earned overtime compensation at a rate of one and half times your normal wages as requires under the Federal Fair Labor Standards Act or Ohio Fair Labor Standards Act, contact the attorneys at Spitz, The Employee’s Law Firm today for a free and confidential initial consultation.  Or maybe you are being misclassified as an exempt employee. The wage and hour lawyers at Spitz, The Employee’s Law Firm will provide you with the best options for your overtime pay dispute situation.  If you even think that you may be entitled to overtime pay that you are not being paid, call 866-797-6040.


The materials available at the top of this overtime, wage and hour web page and at this employment law website are for informational purposes only and not for the purpose of providing legal advice. If you are still asking, “Am I entitled to overtime?”, “Does my job have to pay me for …”, “My paycheck is not right…” or “What do I do if…”, the your best option is to contact an Ohio overtime attorney to obtain advice with respect to FLSA questions or any particular employment law issue. Use and access to this employment law website or any of the links contained within the site do not create an attorney-client relationship. The legal opinions expressed at the top of this page or through this site are the opinions of the individual lawyer and may not reflect the opinions of Spitz, The Employee’s Law Firm, Brian Spitz, or any individual attorney.

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