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OVERTIME
PAY FOR TWO DIFFERENT JOBS
Q: Do I have to pay overtime to a nonexempt employee who is working two different
jobs? If so, how do I calculate it?
A: According to the federal Fair Labor Standards Act (FLSA), employers must pay
overtime to nonexempt employees for all hours worked over 40 in a single workweek, even if
the employee is working two separate jobs at the same organization.
Calculating overtime can be a little tricky when an employee works two or more jobs for
which the employee is paid different hourly rates since overtime must be based on the
employee’s "regular rate of pay." Typically, the employee’s regular
rate of pay when he works two jobs is calculated as the weighted average of the different
rates. For example, the regular rate of an employee who works 35 hours per week at $15 per
hour as a machine operator ($525), and works 10 hours that same week at $7 per hour
cutting the grass outside the plant ($70), is $595 divided by 45 hours, or $13.22 per
hour. Thus, the overtime rate for this employee is one and one-half times $13.22, or
$19.83 per hour, regardless of which job the employee performs during the extra hours. The
employee’s regular and overtime rates will vary from week to week with the number of
hours spent performing each job.
Alternatively, an employer and employee may agree, before the work is performed, that
the overtime rate will be based on the regular rate that applies to the type of work
performed during the hours in excess of forty. Therefore, if an employee spends 35 hours
in a week working as a machine operator at $15 per hour, and five hours a week cutting the
grass at $7 per hour, the overtime rate for any additional hours spent cutting the grass
is $10.50 per hour. Conversely, the overtime rate for any additional hours spent working
as a machine operator is $22.50. This method of computation is available for hourly
employees only and does not apply to nonexempt salaried employees.
These overtime requirements, instituted in 1938 to prevent employers from taking
advantage of employees, can turn what seems to be a "win-win" situation
(allowing your employees to perform a necessary job and earn extra money) into a penalty
for employers. As a result, some employers hire independent contractors to do these jobs
at straight time rates instead of paying their own employees the overtime.
For more information on calculating overtime, see Pay Procedures, Chapter 305, page
305:8, note 15.
This article is not intended as legal advice. Readers are encouraged to seek
appropriate legal or other professional advice.
For more articles please click here.
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