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What Is Time and a Half, and Who Qualifies for It?
Mike Kappel Mike Kappelular rate of pay plus
dministrative, or professional job duty.
There is also a test for employees who work in outside sales. If an employee’s primary duty is making sales, they are exempt. The employee must also regularly perform work away from your business. They do not have to meet salary exemption requirements to be exempt.
Nonexempt employees
On the flip side, nonexempt employees:
Do not make at least $35,568 annually
Are not salaried and/or
Do not have exempt job duties (e.g., administrative)
If you have nonexempt employees, you must pay them time and a half (1.5 times) for any hours worked over 40 a week.
There’s a common misconception that paying an employee a salary means they’re exempt from overtime wages. You can have salaried nonexempt employees who are eligible for overtime pay.
Your state may have stricter overtime laws than the FLSA. Check with your state to learn about the overtime laws you need to follow.
How to calculate time and a half
Again, pay nonexempt employees time and a half for any overtime hours they work.
A good chunk of nonexempt employees receive hourly wages instead of a salary. However, because nonexempt employees can be salaried, you must know how to calculate time and a half for both salaried and hourly employees.
Hourly employees
Let’s say you have a nonexempt hourly employee who earns $12 per hour. During the last workweek, the employee worked 45 hours (40 regular hours + 5 overtime hours).
To calculate time and a half for the hourly employee, follow these steps:
Calculate the employee’s regular earnings
Find the time and a half pay rate (1.5 x Regular Hourly Wage)
Multiply the overtime rate by the number of overtime hours
Add together the regular and overtime wages
To find the employee’s regular earnings, multiply their regular pay rate ($12) by 40 hours.
$12 X 40 = $480 in regular wages
Next, calculate the employee’s time and a half pay rate. Multiply 1.5 by the employee’s regular rate of pay.
1.5 X $12 = $18 per hour of overtime
Multiply the overtime rate from above ($18) by the number of overtime hours the employee worked during the week.
$18 X 5 = $90 of overtime pay
Last but not least, add the employee’s regular wages and overtime pay together to find the employee’s total wages. You owe the employee $570 in total gross wages ($480 + $90).
If your employee has multiple pay rates for different jobs within your company, you must calculate weighted overtime for their wages.
Salaried employees
When it comes to calculating time and a half for salaried employees, there are two methods you can use. The method you use depends on if the employee receives a salary that covers a fixed number of hours or if they receive a salary that covers all worked hours (aka fluctuating workweek).
Salary with fixed hours
For a salaried employee with fixed hours, use these steps:
Calculate the employee’s regular hourly rate
Calculate the employee’s regular earnings
Find the time and a half pay rate (1.5 x Regular Hourly Wage)
Multiply the overtime rate by the number of overtime hours
Add together the regular and overtime wages
Say your salaried employee earns $1,000 per week. You expect the employee to work 34 hours this week, but they wind up working 45.
This is not intended as legal advice; for more information, please click here.
Categories: Payroll
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