At the first modern May Day parade in America, marchers called out, “Eight-hour day with no cut in pay!” Behind the marchers’ rallying cry was a solemn recognition of the decades of violence enacted on labor organizers who dared to strike, march, or negotiate for limitations on the length of the work day. Indeed, countless people were killed in the fight for the eight hour day. Those workers didn’t fight in vain; eventually, in 1938, the federal government responded with overtime pay, which limits the amount of hours a person can work in a week before their employer is penalized with a requirement to increase that worker’s pay to 1.5 times the regular rate. The resulting reduction in actual hours worked did wonders for the health of the people, the planet, and the economy.
Overtime can be tricky to calculate. Employers often take advantage of the complexity of overtime rules to avoid letting you know that you’re not getting paid what you’re owed. Here’s the very basics of what you need to know to make sure you’re getting properly compensated:
What is a Work Week?
Modeled after a somewhat arbitrary unit of time decided approximately four thousand years ago in Babylon, work weeks are any period of seven consecutive days. The law is flexible about how that week is measured. An employer can decide, for example, that the work week starts on Wednesday at 10:00 and ends on Tuesday at 9:59, even though most people perceive the work week to begin on Monday or Sunday. Your worked hours cannot be averaged over multiple weeks.
How Much Overtime Should I Be Paid?
If you’re paid hourly, and you work more than forty hours in one week, all working time after 40 hours should be at 1.5x your regular pay rate. For example, if your regular pay rate is $15 per hour, and you’ve worked 45 hours this week, 40 of those hours should be paid at $15, and 5 of those hours should be paid at $22.50 per hour. Some states have additional rules governing the maximum hours per day and the number of days without rest.
I’m Salaried. Can I Get Overtime Pay?
The Fair Labor Standards Act sets forth rules about which employees qualify for salaries. While salaried employees are not generally required to be paid for overtime work, many employees that are classified as salaried are actually supposed to be paid hourly. Employees that are supposed to be paid hourly are entitled to overtime pay.
I Have a Shift Differential. How Does That Affect My Overtime Rate?
Your shift differentials (or incentive pay, or certain bonuses) are a part of your regular rate of pay. For example, if you are paid $15 per hour, but you only work overnight, and your employer gives you an overnight incentive pay of an extra $5 per hour, you should be getting paid $20 ($15+$5) per hour for the first 40 hours, then $30 ($20*1.5) per hour thereafter.
Things get a little harder to calculate if you only sometimes work an incentivized shift, so just a part of your total hours have an incentive pay attached. Let’s say that you work 60 hours per week, 30 of which have incentive pay. You’ll calculate like this:
- You worked half of this week at $20 per hour: 30 hours X $20 ($15+5)= $600
- The other half, you worked at $15 per hour: 30 hours X $15= $450
- Add the totals together: $600+$450=$1,050
- Divide by the total number of hours worked: $1,050/60 hours=$17.50
- $17.50 is your regular rate of pay.
- Your total pay should be equal to $1,225 (($17.50 X 40 hours)+($26.25 X 20 hours))
For more examples of how to calculate your regular rate of pay, visit the Department of Labor Wage and Hour Fact Sheet #56(c).
The Future of Overtime
Thanks to advocacy groups testing new ideas, such as a 4 day work week, various methods of reducing hours while retaining pay, and universal basic income, the science behind the benefit of a reduction in total work time is growing. Perhaps, with enough support from working people across the country, the laws surrounding overtime could change to reflect the findings of these studies.