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Overtime/Overtime Pay

By , About.com Guide

Overtime is the additional amounts paid to hourly employees who work more than 40 hours in a workweek. Federal law requires that hourly employees who work more than 40 hours in a workweek must be paid overtime, at a minimum of 1 1/2 times the regular pay rate.

Overtime Pay is the amount of overtime paid to each employee in a pay period. Overtime pay is calculated:
Hourly pay rate x 1.5 x overtime hours worked.

Here is an example of total pay for an employee who worked 42 hours in a workweek:

  • Regular pay rate x 40 hours = Regular pay, plus
  • Regular pay rate x 1.5 x 2 hours = Overtime pay, equals
  • Total pay for the week.

A business pay overtime at a higher rate or it may pay overtime before 40 hours (at 35 hours a week, for example), but the minimum is 1.5 times regular pay after 40 hours in a workweek.

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