What Is Overtime Pay for $17 an Hour?

Overtime pay provides additional compensation to employees who work beyond standard hours. Under federal law, the Fair Labor Standards Act (FLSA) requires eligible employees to receive overtime pay at a rate of at least one and one-half times their regular rate of pay. This higher rate applies to all hours worked over 40 in a workweek.

Calculating Overtime Pay

Overtime compensation is calculated once the regular rate is determined. For an employee earning $17 per hour, the overtime rate is $17 multiplied by 1.5, equaling $25.50 per hour. This rate applies to hours worked beyond 40 in a workweek.

For example, if an employee works 45 hours in a single workweek, the first 40 hours are paid at the standard $17 per hour, totaling $680. The remaining five hours are overtime. These five overtime hours are compensated at $25.50 per hour, amounting to an additional $127.50. The employee’s total gross pay for that workweek would be $807.50.

Defining the Regular Rate of Pay

The “regular rate of pay” is a comprehensive figure, not simply an employee’s hourly wage, as stipulated by the FLSA. This rate generally includes all compensation paid to an employee for their employment, unless specifically excluded by federal law. Employers must factor in various forms of remuneration to accurately determine this rate for overtime calculations.

Payments that typically must be included in the regular rate are non-discretionary bonuses, which are bonuses promised or expected as part of employment, such as those for attendance, production, or retention. Commissions, whether paid weekly, monthly, or on another basis, also contribute to the regular rate. Additionally, shift differentials, on-call pay, and certain payments for housing or lodging allowances are usually integrated into this calculation.

Conversely, some payments are generally excluded from the regular rate calculation. These exclusions include gifts, truly discretionary bonuses where both the decision to pay and the amount are at the employer’s sole discretion, and payments for periods when no work is performed, such as vacation, holiday, or sick pay. Expense reimbursements for business costs, employer contributions to benefit plans, and certain premium payments for weekend or holiday work that are already at least 1.5 times the established rate can also be excluded.

Understanding Overtime-Eligible Hours

“Hours worked” for overtime purposes generally encompasses all time an employee is on duty, at a prescribed workplace, or at any other location where they are permitted to work. This can include activities such as attending required training sessions, traveling between different job sites during the workday, and short rest breaks. If an employee is performing work for the benefit of the employer, even if not explicitly directed, that time may count as hours worked.

Overtime pay typically applies to non-exempt employees, who are usually hourly wage earners or those whose job duties do not meet specific criteria for exemption. Conversely, exempt employees are not eligible for overtime pay, regardless of the hours they work. These roles often include executive, administrative, professional, and outside sales positions, provided they meet specific salary and duties tests established under federal regulations.

The “workweek” is the fundamental unit for calculating overtime, defined under the FLSA as a fixed and regularly recurring period of 168 hours, or seven consecutive 24-hour periods. This workweek does not need to align with the calendar week and can begin on any day and at any hour established by the employer. The FLSA requires that overtime be calculated based on hours worked within each single workweek, and employers cannot average hours over multiple weeks to avoid overtime obligations.

State and Local Overtime Provisions

While the Fair Labor Standards Act establishes federal overtime standards, state and some local jurisdictions may have their own laws concerning overtime pay. These state and local provisions can offer more extensive protections or benefits to employees than federal law. For instance, some jurisdictions might require overtime pay for hours worked beyond a certain threshold in a single day, not just after 40 hours in a workweek.

When state or local laws provide more generous overtime rules than federal law, employers are required to follow the law that offers the greater benefit to the employee. Employees seeking detailed information about overtime rules applicable to their specific employment should consult their state’s Department of Labor website or relevant local labor law resources.