Do I Have to Pay Overtime If We Use Flat Rate?
Question: I am inquiring about overtime requirements for Flat Rate Pay (i.e. piece meal). Is overtime supposed to paid to employees that are paid on a flat rate per job basis if they work over 40 hours? If so how is overtime calculated?
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 Workweek.
Step Two: Calculate Total Hours Worked in Workweek.
Step Three: Divide Total Compensation by Total Hours Worked = “Regular
Rate of Pay.”
Overtime Pay (i.e. excess pay) = 1.5 times Regular Rate of Pay for Hours Worked > 40 During the Workweek.
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. For help with particular legal needs, members are invited to consult with ACCA’s LegalTools Counsel, Brooke Duncan III of Adams and Reese LLP. Mr. Duncan can be reached at 504-585-0220 or by email at email@example.com.
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