How To Calculate Time And A Half

Table of Contents

3. How do you calculate time and a half?

4. How do you factor bonuses into time and a half?

5. What makes figuring out time and a half difficult?

What does time and a half mean?

According to the Fair Labor Standards Act (FLSA), when a non-exempt employee works more than forty hours per week they are entitled to overtime. The overtime pay in this situation is referred to as time and a half pay. It gets this name because the pay is equal to the worker’s hourly rate times 1.5.

Sounds simple enough, right? Actually, it can be hard to calculate time and a half correctly because of the various state and FLSA exemptions and rules. In this article, our employer defense attorney will go over the various aspects of time and a half so that business owners can avoid the consequences of miscalculating.

Who is eligible for time and a half?

The FLSA states that some workers are eligible for time and a half according to their wages and job duties. Others are not. In general, most salaried workers are not eligible for time and a half. This employee would make in excess of $684 per week or $35,568 per year. Hourly employees who work the typical forty-hour week are nonexempt and should get time and a half for overtime. These workers include those in hospitality, retail, and healthcare.

How do you calculate time and a half?

Before you calculate overtime pay, you must review the difference between salaried and hourly workers. Most nonexempt employees are hourly workers, but you should know how to compute time and a half for salaried employees who fall into the non-exempt category.

Hourly workers

It is pretty simple to calculate time and a half for hourly employees since you already know what they make in an hour. Let’s say Amanda is an hourly employee who makes $15 per hour. This week, Amanda has worked 50 hours. To calculate how much pay Amanda has earned, including overtime, you must first get the week’s total regular wages. To do this, multiply the normal rate of pay by forty.

$15 x 40 hours = $600 in regular pay

Now, to figure out the time and a half rate, you need to multiply the normal rate by 1.5.

$15 x 1.5 = $22.5 of overtime per hour

To figure out how much overtime pay Amanda made, you multiply the overtime pay rate by how many extra hours she worked.

$22.5 x 10 = $225 of overtime pay

To get the total amount Amanda earned, you add the overtime wages to the regular wages.

$600 + $225 = $825

This means Amanda should receive $825 for her workweek. This number takes into account the extra ten hours she worked at the time and a half rate.

Salaried workers

There is an extra step involved in calculating time and a half for salaried workers. This is because they receive a set wage. Connor receives $1000 as his weekly salary and works 38 hours. However, this week he has worked 46 hours. To calculate his overtime pay, you first find the normal hourly rate by dividing the week’s salary by the set hours.

$1000 / 38 = $26.32 per hour

Then we calculate Connor’s total regular wages.

$26.32 x 40 = $1,052.80

We now multiply the hourly rate by 1.5 to get the overtime rate.

$26.32 x 1.5 = $39.48 per hour of overtime

Now we compute the full overtime pay.

$39.48 x 6 = $236.88

Then we add the overtime wages to the regular time wages.

$1,052.80 + $236.88 = $1289.68

Connor therefore needs to receive $1289.68 in wages, which includes regular pay and overtime. Companies can decide to pay overtime according to the agreed-upon hours versus the 40-hour workweek. For example, Connor’s employers may decide to pay him for overtime once he exceeds 38 hours.

How do you factor bonuses into time and a half?

When you calculate regular pay and time and a half, you should include nondiscretionary bonuses.

Let’s say Theo earns $15 per hour and worked 46 hours this week. He also got a $25 bonus for excellent performance. To calculate his regular wage and time and a half pay, we must first figure out the normal weekly income. To do this, we add the total hours to the bonus.

$15 x 46 hours + $25 = $715

Then we figure out the new regular rate based on the weekly earnings.

$715 / 46 hours = $15.54

Now we multiply the new hourly rate by forty to get the week’s regular wages.

$15.54 x 40 = $621.6

Then we multiply the normal rate by 1.5 to get the hourly overtime rate.

$15.54 x 1.5 = $23.31 of overtime per hour

Now we multiply the hourly rate of overtime by the hours of overtime worked.

$23.31 x 6 = $139.86

To find out the total pay, we add regular and overtime wages.

$715 + $139.86 = $854.86

Theo should therefore earn $854.86 in wages, which includes the bonus he received.

When you calculate time and a half pay that includes bonuses, it is important to first figure out what period the bonus applies to under overtime law.

What makes figuring out time and a half difficult?

It can be hard to calculate time and a half pay due to the various conditions and rules on the state and federal level. Even though it should be straightforward, there are often miscalculations. Below are a few of the usual challenges when determining time and a half.

Correctly classifying workers

When it comes to calculating time and a half pay, there is always the question of whether a worker is exempt or nonexempt under the FLSA. It is not as obvious as believing that only hourly employees are nonexempt.

To qualify for time and a half pay, an employee needs to meet certain requirements regarding duties and wages. Even salaried workers may qualify for overtime, which is why it is essential to know the federal and state exemptions.

State laws

The FLSA reports that the minimum wage is $7.25 an hour. However, the standards in different states vary. In New York, the minimum wage is $13.20, while in California it is $14.00. Other states, like New Hampshire and North Carolina, share the federal government’s minimum wage.

It may seem that the fluctuating workweek method may save employers overtime expenses. However, it is easy to make calculation errors with this method. Also, some states like California prohibit it. If there are errors in this kind of calculation, there could be violations and lawsuits.

It is vital that companies understand how both state and federal laws affect them. When it comes to time and a half pay, the greater minimum wage should be used.

Different pay rates between shifts/teams

It can be difficult to base time and a half pay on accurate rates, especially when employees might receive different rates. It is important to calculate time and a half pay rates using the proper rates for every worker, whatever role or team they work in.

Excluding bonuses in regular pay rate

Bonuses should be counted when calculating the regular rate of pay period. This includes bonuses that the FLSA regards as nondiscretionary. A nondiscretionary bonus includes bonuses for good performance and for good attendance. These are predetermined. These bonuses are nondiscretionary because the workers know about the bonus and expect when and how they can get it.

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