How is Overtime Calculated for Multiple Rates of Pay in New York?

Calculating Overtime for Multiple Rates of Pay in New York: New York City Wage and Hour Attorney Explains

Calculating wages can be a very difficult task.  This is particularly true when an individual needs to calculate overtime.  As discussed in our blog post yesterday, calculating overtime when an individual is salaried can also be complicated but there is a formula that individuals can use.  Adding a level of complexity for today’s blog post is calculating overtime when an individual has multiple rates of pay due to different tasks or titles.  Calculating overtime for multiple rates of pay also has a formula to use.

This is actually a common question and frequently disputed or litigated issue for how to calculate overtime for individuals with multiples rates of pay.  Our experienced New York City wage and hour attorneys explain how this task is performed below:

Step One: A Weighted Average is Used for Employees With Multiple Rates of Pay to Determine the “Regular Rate of Pay”

The first step in determining overtime wages is calculating the “regular rate of pay.”  An individual who has multiple rates of pay will use a “weighted average” to calculate the employee’s “regular rate of pay.”  This amount must be more than minimum wage.

For example, if an employee works for 20 hours a week as a dishwasher in a restaurant and earns $10 an hour, his or her weekly wages will be $200.  If the employee also works 30 hours a week as a chef in the restaurant and earns $20 an hour, his or her weekly wages will be $600.

Next, the employee’s wages are weighted together.  This is calculated by dividing his total wages by his total hours.  In the above example, the employee earns $800 a week and works 50 hours a week, therefore his hourly rate is $16.00 per hour.

Step Two: The Weighted “Regular Rate of Pay” is Used to Calculate Overtime

Once the employee’s regular rate of pay is calculated, his or her overtime rate can be calculated and applied to all hours over 40 per week.  This must be more than minimum wage.

In the example above, the employee’s weighted regular rate of pay is $16.00 an hour.  This means that his overtime will be $24.00 an hour for all hours worked over 40 hours in a typical workweek.

Calculating Overtime for Multiple Rates of Pay is Tricky—Have a New York City Wage and Hour Attorney Calculate It For Your and Fight for Your Rights

The experienced New York City Wage and Hour attorneys at SAMUEL & STEIN are dedicated to asserting and defending the rights of employers and working people throughout New York and New Jersey.  We have the resources, experience, and knowledge necessary to ensure your legal rights are protected and you are not taken advantage of.  Call us today by dialing (646) 681-4193 or use the convenient “Evaluate Now” box on our webpage.  Together we can help answer your questions and protect your rights.

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