What is Overtime Pay?

Overtime pay is a form of compensation for employees who work more than the standard number of hours in a given workweek. It is usually calculated as one and a half times the employee’s regular rate of pay for each hour worked beyond the normal 40-hour workweek.

For example, if an employee normally earns $10 per hour, they would be paid $15 per hour for any hours worked over 40 in a given week.

Who Is Eligible for Overtime Pay?

In the United States, overtime pay is governed by the Fair Labor Standards Act (FLSA). According to this law, most employees are eligible for overtime pay if they work more than 40 hours in a single workweek.

However, there are some exceptions to this rule. For example, certain salaried employees may not be eligible for overtime pay even if they work more than 40 hours in a week. Additionally, some states have their own laws governing overtime pay that may differ from federal regulations.

How Is Overtime Pay Calculated?

Overtime pay is typically calculated as one and a half times an employee’s regular rate of pay for each hour worked beyond the normal 40-hour workweek. This means that if an employee normally earns $10 per hour, they would be paid $15 per hour for any hours worked over 40 in a given week.

It is important to note that employers must also take into account any bonuses or commissions when calculating overtime pay. For example, if an employee earns a bonus of $50 for working extra hours in a given week, their overtime rate would be calculated based on their total earnings including the bonus.