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Is Your Employer Calculating Your Overtime Pay Correctly?

Posted On: May 1, 2014

In the past year, we have had an increase in questions about whether our clients’ employers are calculating overtime correctly. Here is a general overview of the FLSA and its application to you:

  • The FLSA requires payment of 1.5 times the “regular rate of pay” for all overtime hours worked. For miscellaneous employees, overtime is required for all hours worked above 40 hours actually worked in a week. For safety employees, overtime is required for all hours worked above 7(k) thresholds (up to 171 hours in 28 days for law enforcement personnel and 212 hours in 28 days for fire suppression personnel).
  • Under the FLSA, overtime is NOT simply your base hourly rate multiplied by 1.5 times the number of hours of overtime worked. Instead, the FLSA requires that all payment an employee receives as remuneration for time worked must be INCLUDED to calculate your premium overtime rate. Only pay categories specifically excluded by federal law are not applied when calculating the “regular rate of pay.” Payment for shift differentials, education incentives, longevity premiums, hazardous duty, working out of classification, and specialty assignment—to name just a few—MUST be included when the employer calculates FLSA overtime. Note that this requirement cannot be changed by an MOU.
  • Among the pay categories specifically EXCLUDED from overtime calculations are: sums paid as gifts or rewards for service (such as a holiday bonus), clothing allowances, call-back pay (except for the time actually worked), and reimbursements for expenses.
  • For some pay types, such as holiday pay, the manner in which payment is structured determines whether it should be included or excluded. For example, if holiday pay is received without reference to actual hours worked, it will typically be INCLUDED.

In our experience, employers often struggle to calculate the “regular rate of pay” correctly. The rules are complex and administration of them is difficult, particularly as more and more agencies move to automated payroll systems. This is made more complicated by the fact that FLSA overtime can be distinct from contractual overtime—that is the contractual rate agreed to by the parties in the collective bargaining agreement. However, the FLSA places the burden on the employer to prove that a particular payment should not be included as part of your regular rate of pay for overtime calculation purposes.

Even small mistakes in overtime calculations can have an big impact on your paycheck, so we recommend that you review your paycheck to ensure all of your overtime is being calculated correctly.

If you have any questions, please contact Jennifer Stoughton at

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