HR Weekly News - How is Overtime Calcuated?

Weekly HR News – FLSA
How is overtime calculated?

Overtime for nonexempt employees must not be calculated at less than one-and-one-half times the regular rate of pay.  The regular rate of pay is the hourly pay of the employee, which must be greater than $7.25 an hour (current minimum wage), plus any other incentives or pay the employee receives.

Do we have to pay overtime if an employee works more than eight hours in a day?

No. Overtime is based on the number of hours worked in a seven-day workweek, not on the amount of hours worked in a single day. This is usually any hours worked over 40 unless the city has a policy that allows for overtime at a period less than 40 hours.  The city cannot enact a policy making it greater than 40 hours.

The only exception to this is found in KRS 337.050 in regards to an employee who works seven days straight during the employer designated workweek and the total number of hours is in excess of 40.  In this case, the city must pay the employee overtime for all hours worked on the seventh day. 

Do we have to include paid holidays in overtime calculations?
No.  Not unless the employee actually worked the hours on the holiday.  Overtime is only paid for hours “worked”.  If an employee works the holiday they would be paid the holiday hours plus the hours worked.  For example the employee actually works 40 hours during a week with a paid holiday (assuming that the employee works 8 hour days) so they would have 48 hours paid in straight time.  If the employee actually works 42 hours in a week with a paid holiday they would receive straight time for 48 hours and overtime for 2 hours.  The city would also have the option of allowing the employee to take another day off during the work week as a substitute for the holiday. 

For questions on wage and hour issues or other personnel matters, contact Andrea Shindlebower with the KLC Legal Department.