The Legal Toolbox #102

Posted on:

September 17, 2014

Question: Am I required to pay overtime to employees who are paid flat rate (i.e., piecemeal)? If so, how is the rate determined?”

Answer: Yes, manual workers who are paid by the “piece,” or per unit of work performed, must be paid overtime for all hours worked after 40 in any given workweek. To calculate the overtime pay, perform the following steps:

Step One:
Calculate total compensation during the workweek.

Step Two:
Calculate total hours worked in the workweek.

Step Three:
Divide total compensation by total hours worked. The result is the “Regular Rate of Pay.”

Overtime Pay (i.e. excess pay) should be 1.5 times the Regular Rate of Pay for all hours worked in excess of 40 during the workweek.

DISCLAIMER
This response is intended for general informational purposes only and should not be construed as legal advice or a legal opinion, nor is this column a substitute for formal legal assistance. If you have any additional questions regarding this or other human resource and labor-related questions, please email Hilary Atkins, ACCA General Counsel, at hilary.atkins@acca.org.