How is overtime required to be calculated, and when must it be paid?
The regular rate of pay is the rate at which overtime compensation must be calculated. For each hour of overtime worked an employee must be paid one and one-half times the employee’s regular rate of pay. The regular rate of pay does not necessarily equal an employee’s hourly rate of pay. Included in the regular rate of pay are work-related payments that are not made for overtime work such as shift differentials, bonuses, longevity pay, educational incentive pay, etc. Thus, the regular rate always equals or exceeds an employee’s hourly rate of pay or, if the employee is salaried, the employee’s hourly equivalent. INCLUDED IN THE REGULAR RATE OF PAY, regardless of whether or not an employee is salaried or hourly paid, are bonuses, shift differentials, educational incentive pay, longevity pay, and with the exception of the items listed below, any other non-discretionary type of payment. Gifts, discretionary bonuses, pension benefit plans, profit sharing and thrift saving plans may all be