Calculating Overtime Pay at the Wrong Rate
The Fair Labor Standards Act (FLSA) requires employers to pay all covered, nonexempt employees overtime pay when they work more than 40 hours in a workweek. Overtime pay must be paid at the rate of at least one and one-half times your “regular rate” of pay. The “regular rate” includes “all remuneration for employment paid to, or on behalf of, the employee,” excluding seven specific types of payments. That means, generally all compensation an employee receives each must be included to determine the hourly rate from which overtime pay must be paid. Many employers illegally exclude certain payments from the regular rate for overtime purposes, such as shift differentials, bonuses and commission payments, thereby resulting in the employer paying the employee overtime wages based on an incorrectly low regular rate of pay. If you are paid shift differential, bonuses, or commission payments that are excluded from the regular rate of pay for overtime pay purposes, please contact Werman Salas P.C.