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Overtime: Is Your Employer Paying You The Right Overtime Rate?

Published By | Feb 28, 2022 | Employment Law, Retaliation, Wage: Minimum Wage, Wage: Overtime, Wage: Tipped Employees, Wrongful Termination |

Best Ohio Overtime Law Attorney And Top Wage And Hour Lawyers Reply: How Does The Fair Labor Standards Act Require Employers To Calculate Overtime? Is The Overtime Rate Just Time And A Half Of My Hourly Rate? Do Other Payments My Employer Gives Me Change How Much Overtime I Am Entitled To?

One of the most common misperceptions about overtime is that it is “time and a half” the hourly rate an employee is paid. For example, if an employee is paid $10.00 per hour, most people will tell you that the correct overtime rate for that employee is $15.00 per hour. And, if the employee is only paid their hourly rate with no other pay, most people would be correct. But, as our wage and hour attorneys will tell you, the Fair Labor Standards Act (“FLSA“) and Ohio Minimum Fair Wage Standards Act (“OMFWSA“) are rarely that simple.

As it turns out, these laws require employers to base the overtime rate not only on some predetermined hourly rate (i.e, $10.00 per hour), but instead on the “regular hourly rate,” which is the sum of all pay received / all hours worked. For the best explanation, 29 C.F.R. § 778.109 provides:

The ‘‘regular rate’’ under the Act is a rate per hour. The Act does not require employers to compensate employees on an hourly rate basis; their earnings may be determined on a piece-rate, salary, commission, or other basis, but in such case the overtime compensation due to employees must be computed on the basis of the hourly rate derived therefrom and, therefore, it is necessary to compute the regular hourly rate of such employees during each workweek.

The regular hourly rate of pay of an employee is determined by dividing his total remuneration for employment (except statutory exclusions) in any workweek by the total number of hours actually worked by him in that workweek for which such compensation was paid.

The regulations go on to provide an example of this calculation method in action:

a $12 hourly rate will bring, for an employee who works 46 hours, a total weekly wage of $588 (46 hours at $12 plus 6 at $6). In other words, the employee is entitled to be paid an amount equal to $12 an hour for 40 hours and $18 an hour for the 6 hours of overtime, or a total of $588. …

If the employee receives, in addition to the earnings computed at the $12 hourly rate, a production bonus of $46 for the week, the regular hourly rate of pay is $13 an hour (46 hours at $12 yields $552; the addition of the $46 bonus makes a total of $598; this total divided by 46 hours yields a regular rate of $13). The employee is then entitled to be paid a total wage of $637 for 46 hours (46 hours at $13 plus 6 hours at $6.50, or 40 hours at $13 plus 6 hours at $19.50).

Thus, if your employer pays you additional wages beyond your hourly rate, often times those additional wages have to be factored into the overtime rate. This requirement is fairly broad, including “all remuneration for employment paid to, or on behalf of, the employee.” (29 C.F.R. § 778.18). However, some types of extra pay don’t need to be included. These exceptions are listed in 29 U.S.C § 207:

  • Gifts, like money given as a Christmas gift, which is not based on performance or hours worked;
  • Holiday pay or vacation pay;
  • Discretionary bonuses (discretionary means its not promised to you in advance or otherwise guaranteed);
  • Payments to a 401k plan or for “a bona fide plan for providing old-age, retirement, life, accident, or health insurance or similar benefits for employees”;
  • Certain premium payments for working more than eight hours a day;
  • Certain premium payments made to an employee for working on the weekend or on a holiday;
  • Certain premium payments made because of a union agreement; and
  • Reasonable payments for travel expenses, or other expenses, incurred by an employee in the furtherance of his employer’s interests and properly reimbursable by the employer.

As regular readers of this blog already know, many employers attempt to bend the rules and avoid paying overtime. Sometimes the failure to pay overtime is straightforward (See: What Can We Do If Our Job Doesn’t Pay Anyone Overtime?; and My Job Won’t Pay Me Overtime Wages! What Can I Do?). And, sometimes the violation is far more technical.

The recent settlement in Junkersfeld v. Med. Staffing Sols., Inc., provides a great example of a significant underpayment of overtime based on what appears to be a “technical” FLSA violation. In Junkersfeld, the employer was a medical staffing company that provided hourly health care professionals with short term assignments that required them to travel out of their hometowns. In addition to their hourly wages, the employer also paid these employees for meals, lodging, and other incidental expenses. While the employer argued that these payments were strictly reimbursements, and thus excluded from the regular rate of pay (see above), Junkerfeld argued because the amount of the “reimbursements” was based on the hours worked, and not the actual expenses incurred by the employees, they were actually wages that should be included in the overtime rate. Unfortunately for the employer, Junkerfeld brought her case as a hybrid collective action and class action, significantly increasing its exposure from just one employee (Junkerfeld) to just over 150 employees. Perhaps this is why the employer opted to try and quickly settle the case, paying $650,000.00 to do so. The settlement provides employees who opt into the case unpaid overtime plus “liquid” (or double) damages.

Even if you think that your employer has paid you overtime properly, you might be getting shorted. To make sure you are being paid properly, you should contact the experienced overtime attorneys at Spitz, who have successfully litigated individual and collective action overtime cases throughout the country and are ready to help you now.

Wage and hour claims under the FLSA are especially complex. If you want to get the best result possible, hire the best wage theft attorneys that you can find. The wage and hour attorneys at Spitz, The Employee’s Law Firm work these types of claims every single day. These lawyers are here and ready to assist you with you minimum wage, overtime and other wage and hour claims.

If you believe that the company that you are working for is not fully paying you all your rightfully earned wages and for all the hours that you worked as mandated under the Federal Fair Labor Standards Act or Ohio Minimum Fair Wage Standards laws, reach out to our the attorneys at Spitz, The Employee’s Law Firm today for a free and confidential initial consultation. Don’t try to go it alone when dealing with complicated FLSA claims. Call our Cleveland, Columbus, Cincinnati Detroit, Boardman, and Toledo attorneys right now.


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, “What is my failure to pay overtime case worth?”, “Does my job have to pay me time and half for all overtime hours?”, “My boss only straight time when I work more than 40 hours. Can my job do that?” or “How is overtime calculated under the FLSA”, 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 The Spitz Law Firm, Brian Spitz, or any individual attorney.


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