What is an employee’s regular rate of pay? Is it just what they make per hour of work?
Answer from Marisa, SPHR:
Not exactly. An employee’s “regular rate of pay” is the amount used to calculate their overtime rate for a given time period. You might think of it as an average, of sorts.
An employee’s regular rate is determined by adding up the amount paid for their work, as well as earnings from non-discretionary bonuses (such as those tied to performance or retention), then dividing that amount by the total hours worked.
For example, let’s say Anna earns $10/hour for inside sales work and $15/hour for bookkeeping work. This week, she worked 24 hours in inside sales and 20 hours as a bookkeeper. She also received $50 in commissions that are attributable to this workweek. Her regular rate of pay for this workweek would be calculated as follows:
($10 x 24) + ($15 x 20) + $50 / 44 hours = $13.41/hour (her “regular rate” for the workweek)
Under federal law, non-exempt employees should be paid 1.5 times their regular rate of pay for any hours worked over 40 in a workweek. This means that Anna’s overtime rate would be $20.11 per hour, based on her mix of hourly rates and commission.
Marisa has experience working in a wide variety of HR areas, including payroll, staffing, and on-/ off-boarding. She has worked at both national and local companies, in a wide range of businesses and industries. Marisa earned her B.S. in Business Administration and Communications from the University of Oregon. She loves watching football and basketball, volunteering, and spending time with her two dogs.
Vital Signs Insurance Services, Inc.
PO Box 6360
Folsom, CA 95630 Phone: (916) 496-8750
Email: [email protected]
Fax: (916) 496-8754
Legal Disclaimer: The HR Support Center is not engaged in the practice of law. The content in this article should not be construed as legal advice, and does not create an attorney-client relationship. If you have legal questions concerning your situation or the information you have obtained, you should consult with a licensed attorney. The HR Support Center cannot be held legally accountable for actions related to its receipt.