John is a biweekly employee, whose overtime calculation method is the FLSA-Hourly. This example illustrates how his overtime would be calculated using these two methods:
- when two or more weeks are treated as one period.
- when two or more weeks are treated on a week-by-week basis.
John is paid at a rate of $12 per hour plus a $100 attendance bonus, and his overtime rate is 1.5 times the regular rate. His work schedule for 2 weeks of work is:
- Week 1: 8 hours per day for Monday to Friday = 40 hours
- Week 2: 8 hours per day for Monday to Thursday; 16 hours for Friday; 8 hours for Saturday = 56 hours
When two or more weeks are treated as one period
This calculation is performed when the Calculate overtime on a weekly basis check box is NOT selected.
Biweekly attendance bonus = $100
- 96 hours worked x $12/hour + $100 (attendance bonus) = $1252 (total ST compensation)
- $1252 (total ST compensation) ÷ 96 hours = $13.04 (regular rate)
- $13.04 (regular rate) x ½ = $ 6.52 (half-time premium)
- $13.04 (regular rate) + $6.52 (half-time premium) = $19.56 (overtime rate)
- $13.04 (regular rate) x 80 (straight time hours) = $1043.20 (straight time earnings)
- $19.56 (overtime rate) x 16 (overtime hours worked) = $312.96 (overtime earnings)
Total earnings for the biweekly period = $1356.16
When two or more weeks are treated on a week-by-week basis
This calculation is performed when the Calculate overtime on a weekly basis check box is selected.
$100 (biweekly attendance bonus) ÷ 2 = $50 (weekly bonus equivalent)
Week One:
- 40 hours worked x $12/hour + $50 = $530 (total ST compensation)
- $530 (total ST compensation) ÷ 40 hours = $13.25 (regular rate)
- $13.25 (regular rate) x ½ = $6.63 (half-time premium)
- $13.25 (regular rate) + $6.63 (half-time premium) = $19.88 (overtime rate)
- $13.25 (regular rate) x 40 (straight time hours) = $530 (straight time earnings)
- $19.88 (overtime rate) x 0 (overtime hours worked) = $0 (overtime earnings)
Total earnings for Week One = $530
Week Two:
- 56 hours worked x $12/hour + $50 = $722 (total ST compensation)
- $722 (total ST compensation) ÷ 56 hours = $12.89 (regular rate)
- $12.89 (regular rate) x ½ = $6.45 (half-time premium)
- $12.89 (regular rate) + $6.45 (half-time premium) = $19.34 (overtime rate)
- $12.89 (regular rate) x 40 (straight time hours) = $515.60 (straight time earnings)
- $19.34 (overtime rate) x 16 (overtime hours worked) = $309.44
Total earnings for Week Two = $825.04
Total earnings for the biweekly period = $1355.04