Understanding Overtime Basics
Overtime pay is a crucial component of fair compensation for hourly workers. Under the Fair Labor Standards Act (FLSA), non-exempt employees must receive overtime pay at a rate of at least 1.5 times their regular hourly rate for hours worked beyond 40 in a workweek.
How to Calculate Overtime Pay
The basic formula for overtime calculation is:
- Regular Pay: Regular hours × Hourly rate
- Overtime Rate: Hourly rate × 1.5
- Overtime Pay: Overtime hours × Overtime rate
- Total Pay: Regular pay + Overtime pay
Example Calculation
Let's say you earn $20/hour and worked 45 hours in a week:
- Regular hours: 40 hours × $20 = $800
- Overtime hours: 5 hours × ($20 × 1.5) = 5 × $30 = $150
- Total weekly pay: $800 + $150 = $950
State-Specific Overtime Rules
While federal law sets the baseline at 40 hours per week, some states have additional requirements:
- California: Overtime after 8 hours per day, double time after 12 hours
- Alaska: Overtime after 8 hours per day OR 40 hours per week
- Colorado: Overtime after 12 hours per day OR 40 hours per week
- Nevada: Overtime after 8 hours per day (with conditions)
Common Overtime Mistakes to Avoid
- Not tracking all work hours: Include prep time, cleanup, and travel between sites
- Forgetting about shift differentials: Premium pay must be included in overtime calculations
- Misclassifying employees: Ensure workers are properly classified as exempt or non-exempt
- Ignoring state laws: Always apply the law most favorable to the employee
Use Our Shift Calculator
Calculating overtime manually can be complex, especially with varying shift types and state regulations. Our free shift calculator automatically handles all overtime calculations, including shift differentials, to ensure accurate pay calculations every time.