FLSA Regular Rate Final Rule Overtime Calculation Tutorial 

Thanks so much. Glad you found it helpful.

Thanks! Glad you found it helpful. You are right, I rarely run across anyone who can properly calculate OT in these situations. Even payroll providers. DOL made this way too complicated.

Hi Katie. Your scenario gets very complicated to accomplish. For example, if the non-discretionary bonus happens each month but there are two pay periods in that month (2 weeks each) then yes, you would have to recalculate the previous pay period OT if the bonus covers both pay periods. This can be done using a spreadsheet like the one in the video and then bonused out on the last or future paycheck but it would need to be clearly documented in case of DOL audit or you need to explain it to the employee. This would be a huge administrative burden on the HR folks so I recommend making the bonus every pay period. The only other option is to drag it out over a long period of time so it is not significant (unmotivating to the employee though). I think I cover it in the video but there is a minimum amount the bonus must be over for the calculation to be necessary. Here is the DOL language. "Employers that otherwise meet the requirements for using a basic rate may exclude from the overtime computation any additional payment that would not increase total overtime compensation by more than 40% of the federal or state or local minimum wage, whichever is higher, per week on average for all the overtime weeks in the period for which such payments are made." LMK if you have any more questions.

This calculation only applies if someone does two different roles/jobs in the same company/employer. So yes, if you make $30 an hour in one role and $15 in the other role, when you have worked both roles in the same work week and exceed 40 hours, your OT rate will be a blend of the two rates. You would not get $30 * 1.5 unless you did not have any hours at the $15 rate. If you have a second job with another employer, then this calculation would not apply. Each employer would calculate their own OT rate regardless of what your role / rate is with the second employer. As always, consult with your HR dept or labor attorney to discuss your specific situation to be sure you are getting compensated properly. Check out this DOL presentation to learn more. www.bing.com/ck/a?!&&p=6ed01c7ac112bf11JmltdHM9MTY4ODk0NzIwMCZpZ3VpZD0wOTRhZjI1Yy03NTFjLTZkNjMtMjRkZS1lMTcxNzRlMTZjNjEmaW5zaWQ9NTM0NA&ptn=3&hsh=3&fclid=094af25c-751c-6d63-24de-e17174e16c61&psq=%22Fair+labor+standards+act%22+%22Regular+Rate+Final+Rule%22+.pdf&u=a1aHR0cHM6Ly93d3cuZG9sLmdvdi9zaXRlcy9kb2xnb3YvZmlsZXMvV0hEL3Bvd2VycG9pbnRzL0ZSLXJlZ3VsYXJyYXRlLnBwdHg&ntb=1

@@SSVAinc oh ok HUGE thnaks for reply :) . So is there some scenarios where you might even loose money as a result of having the 2 jobs under the same employer? Also in my opinion, I know it does not matter, but FLSA seems unfair in my opinion because it takes the freedom away from the employee who might be qualified really well for the second job, and the employer since they dont have a right to hire your talent fully.

In my opinion I think the employee and employer should have the option to choose if they want to follow the system that way or not. As long as everybody is happy I dont know why it is such a big deal.

@@curtiseisenbeis2484 Dude!! I completely agree. Employees and employers should be able to be adults and work out their own agreements. These rules are from a legacy industrialized mindset. These days, employees have many options for work and can easily leave an employer who doesn't treat them fairly. Unfortunatley, the DOL has become a bit of a "nanny state" to protect workers from unfair labor practices. Most workers are not able to do the calculations themselves due to the complexity so I could argue both sides in regards to proper compensation. LMK if you have any other questions.

@@curtiseisenbeis2484 Nope. The calculation in the video pays the employee the exact fair amount based on the number of hour worked in each role. Think of it as a blended rate. From that standpoint, DOL did a good job. The problem is the calculation is very complex so most employers and even payroll providers don't understand how to do the calculation accurately. Usually the miscalculation is in favor of the employer so employees in the dual rate situation can get ripped off of overtime owed. Employers found to be out of compliance could face steep fines and packpay owed to employees even though they tried their best to be in compliance or trusted their payroll provider to get it right. This could financially crush a company if a DOL audit or complaint leads to problems. I made this video to help educate folks to avoid future problems and help employees understand how they are supposed to be getting compensated. Hopefully it is helpful.