Answer:
Step-by-step explanation:
Step 1: Add straight-time hourly wages for all hours worked and bonus to determine total straight-time compensation.
($12 hourly rate x 50 hours worked) + $100 bonus = $700
Step 2: Divide total straight-time compensation by total hours worked to determine regular rate of pay.
$700 straight-time pay divided by 50 hours worked = $14
Step 3: Multiply regular rate of pay by .5 and then multiply by total overtime hours.
$14 regular rate of pay x .5 x 10 overtime hours = $70
Since the straight-time earnings have already been calculated for all hours worked (see Step 1), the employee is entitled to an additional 10 hours of overtime pay, calculated at one-half the regular rate of pay.
Step 4: Calculate total compensation.
$70 overtime pay + $700 straight-time pay = $770
State Law: Your state law may require a different formula. California, for example, requires a different methodology for calculating overtime when an employee receives a flat sum bonus.
Note: If the nondiscretionary bonus is earned over a single workweek, as is the case above, the bonus is added to the employee's regular earnings for that workweek when determining the regular rate of pay. However, if the bonus is earned over a series of workweeks, the prorated bonus must be included in the regular rate of pay in all overtime weeks covered by the bonus period.
Example #3: Multiple Rates of Pay
A non-exempt employee works for the same employer in two different jobs. In one workweek, the employee works 10 hours for $10 per hour and 40 hours for $20 per hour. When there are two or more rates of pay, the regular rate for that workweek is the weighted average. To calculate overtime:
Step 1: Calculate total straight-time pay.
($10 hourly rate x 10 hours) + ($20 hourly rate X 40 hours) = $900
Step 2: Divide total straight-time compensation by total hours worked to determine regular rate of pay.
$900 straight-time pay divided by 50 hours worked = $18
Step 3: Calculate overtime premium pay.
$18 regular rate of pay x .5 x 10 overtime hours = $90
Since the straight-time earnings have already been calculated (see Step 1), the additional amount to be calculated is one-half the regular rate of pay.
Step 4: Calculate total compensation for week.
$900 straight-time pay + $90 overtime pay = $990
