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What is the formula to calculate overtime pay? ing to the FLSA, the formula for calculating overtime pay is the nonexempt employee's regular rate of pay x 1.5 x overtime hours worked. This calculation may differ in states that have requirements, such as double time, which are more favorable to the employee.
The Fair Labor Standards Act (FLSA) establishes minimum wage, overtime pay, recordkeeping, and child labor standards affecting full-time and part-time workers in the private sector and in Federal, State, and local governments.
Unless exempt, employees covered by the Act must receive overtime pay for hours worked over 40 in a workweek at a rate not less than time and one-half their regular rates of pay. There is no limit in the Act on the number of hours employees aged 16 and older may work in any workweek.
For example, if an employee is required to work extra hours during the week of Memorial Day, then any hours worked over 40 (counting the 8 hour holiday for Memorial Day) will be compensated either with compensatory time or overtime pay.
The overtime policy should include: Definition of ?standard working hours? and what qualifies as ?overtime? Classification of employees as exempt or non-exempt ing to overtime pay laws. Procedures for recording overtime and ensuring accurate compensation.