The sample Weekly Time Record (top) shows hours worked for an employee who is paid at different rates for different types of work. Weekly pay, including overtime based on $14 per hour, would be $776. But this does not comply with the Fair Labor Standards Act, which gives employers two options for figuring overtime in this situation: 1) Determine an average hourly pay rate for the week ($15.25 in “Weighted Average” example above), then calculate overtime pay based on that amount; or 2) use an overtime rate based on the pay rate for each type of work. Both options increase the employee’s weekly pay by about $18.
The sample Weekly Time Record (top) shows hours worked for an employee who is paid at different rates for different types of work. Weekly pay, including overtime based on $14 per hour, would be $776. But this does not comply with the Fair Labor Standards Act, which gives employers two options for figuring overtime in this situation: 1) Determine an average hourly pay rate for the week ($15.25 in “Weighted Average” example above), then calculate overtime pay based on that amount; or 2) use an overtime rate based on the pay rate for each type of work. Both options increase the employee’s weekly pay by about $18.

Good Guys Construction Co. pays entry-level carpenters a base rate of $14 per hour. A few of these carpenters have become quite skilled, and when they perform higher-level carpentry, such as trim work, the company pays them an extra $3 per hour. When the company pays them overtime, however, it bases the calculation on the $14-per-hour base rate.

The Fair Labor Standards Act (FLSA) states that a non-exempt employee’s regular rate of pay for overtime calculation “includes all remuneration for employment …” (with a few exceptions). This “remuneration” includes incentives or bonuses tied to the employee’s work, commissions based on production, and—significantly in this case—different rates...

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