Overtime rate

Overtime rateis a calculation of hours worked by a worker that exceed those hours defined for a standardworkweek.This rate can have different meanings in different countries and jurisdictions, depending on how that jurisdiction'slabor lawdefinesovertime.In many jurisdictions, additional pay is mandated for certain classes of workers when this set number of hours is exceeded. In others, there is no concept of a standard workweek or analogous time period, and no additional pay for exceeding a set number of hours within that week.

The overtime rate calculates theratiobetween employeeovertimewith the regular hours in a specific time period. Even if the work is planned or scheduled, it can still be considered overtime if it exceeds what is considered the standard workweek in that jurisdiction.

A high overtime rate is a good indicator of a temporary or permanent highworkload,and can be a contentious issue inlabor-management relations.It could result in a higher illness rate,lower safety rate,higher labor costs, and lowerproductivity.

United States

In the United States a standard workweek is considered to be 40 hours.Most waged employees or so-called non-exempt workers under U.S. federal labor and tax lawmust be paid at a wage rate of 150% of their regular hourly rate for hours that exceed 40 in a week. The start of the pay week can be defined by the employer, and need not be a standard calendar week start (e.g., Sunday midnight). Many employees, especiallyshift workersin the U.S., have some amount of overtime built into their schedules so that24/7coverage can be obtained.

Formula

$\textstyle {{\mbox{Overtime Rate }}={\frac {\sum {\mbox{Overtime Hours}}}{\sum {\mbox{Regular Hours (defined)}}}}}\times 100\%$

External links

• The Death of OvertimebyNick Hanauer