Understanding How to Calculate Overtime Pay Correctly
Overview of Overtime Pay CalculationIf you are eligible for overtime pay in Massachusetts, you should understand the basic rules for calculating the overtime pay that you should receive. This is important so you know how to review and understand your pay stubs. It is also important if you are separating from a job and need to know if you have been paid correctly.
Overtime Pay: Defining a WorkweekBoth federal and Massachusetts overtime laws mandate that non-exempt employees receive time-and-a-half for hours worked beyond 40 in a week. But what defines a "week" for overtime purposes? Typically, it spans seven consecutive days, often from Sunday through Saturday. It doesn't have to start on a Sunday, but it must begin on the same day each week.
It's important to note that overtime isn't averaged over multiple weeks, even if you receive biweekly pay. This means you might be entitled to overtime even if you worked fewer than 80 hours in a two-week period. Tracking this can be challenging if your schedule varies, especially if you work in industries like restaurants or retail, where shifts can fluctuate weekly. Calculating the Overtime PremiumFor hourly workers, calculating overtime pay is relatively straightforward: your regular pay rate multiplied by 1.5. For instance, if your regular hourly rate is $16, your overtime hours (any hours beyond 40) should be compensated at $24 per hour. But what if you're salaried, and your job duties aren't exempt from overtime regulations? There are two methods to calculate your overtime rate in this scenario.
Method 1: Divide your weekly salary by 40 hours to determine your regular pay rate, then multiply that by 1.5. For example, with a weekly salary of $700, your hourly rate would be $17.50, and your overtime rate would be $26.25. Method 2 (Fluctuating Workweek): If you're paid a fixed salary regardless of your weekly hours, and you've agreed to this arrangement with your employer, another calculation method is available. Your weekly salary is divided by the total hours worked that week (including overtime hours) to calculate your regular rate of pay. You're then entitled only to the overtime premium (0.5% of the hourly rate) for the extra hours. This method assumes your agreed salary covers "straight time" for all hours and that only the 0.5% premium is owed. However, this method is subject to specific conditions and isn't appropriate or legal in all cases. Overtime Pay: Travel Time and PTOThe overtime premium applies solely to hours actually worked beyond 40 in a week. This means that if you've used 16 hours of paid vacation or sick time in a week and worked 30 hours during the remaining days, you haven't triggered overtime. The same rule applies to other forms of paid time off, such as personal days or paid leave periods.
If your job requires travel between worksites during the day, understanding travel time rules is vital. In general, the travel to your first worksite from home and from your last worksite at the end of the day isn't considered working time, so it doesn't count toward your overtime hours. However, the travel time between these assignments does count. You might be paid at a different rate for travel (as long as it meets minimum wage requirements), but all these hours count toward the 40-hour threshold. If you're paid different rates for travel time, calculating the rate for overtime hours becomes a bit more complex. Your employer can determine a "blended rate" that reflects the average of your travel and actual working time. Your overtime premium pay will then be 1.5 times that blended rate. |
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Emily Smith-Lee is the owner and founder of slnlaw. She is a 1996 graduate of Boston College Law School. She was previously a partner at the Boston office of a large international firm, where she worked for thirteen years before starting the firm that became slnlaw in 2009. She has been recognized as a Massachusetts Superlawyer each year since 2013, and in 2018 earned recognition as one of Massachusetts Lawyers Weekly's Lawyers of the Year. She has written a book on employment law: Rules of the Road, What You Need to Know About Employment Laws in Massachusetts, and helped thousands of clients on both the employee and employer side with issues relating to wage and hour laws, including overtime pay, late or unpaid wages or commissions, employee misclassification, and retaliation against employees asserting rights under the wage and hour laws.
Rebecca Rogers: Rebecca is a 2006 graduate of Boston College Law School, and has worked with slnlaw since 2013. She previously worked as an intellectual property litigation attorney for Fish & Richardson in Boston, Massachusetts, and clerked for the Massachusetts Supreme Judicial Court. Rebecca has helped clients with wage and hour disputes, including employee misclassification, late or unpaid wages or commissions, retaliation under the Wage Act, and advice to both employees and employers about wage and hour law compliance.
Jenna Ordway: Jenna is a 2013 graduate of Quinnipiac Law School, and also earned an LLM in Taxation from Boston University in 2015. She has been affiliated with slnlaw since 2011, first as a law clerk and then as an attorney. Jenna has been recognized since 2019 as a "Rising Star" by Massachusetts Superlawyers. Jenna has helped clients assess their rights under the wage and hour laws, including employee misclassification, untimely payment of final wages, late or unpaid commissions, retaliation, and advice to small business owners about wage and hour law compliance.
Elijah Bresley: Eli is a 2014 graduate of Seton Hall Law school, and has worked with slnlaw since 2020. He previously worked for a boutique employment law firm outside of Boston, and then for the Labor and Employment department of a large Boston firm. He also spent a year clerking for the judges of the Superior Court in Hartford, Connecticut. Eli has helped clients with wage and hour claims, including late or unpaid commissions, retaliation, employee misclassification, and overtime, and litigated these claims in state and federal courts. He also advises employers about employment policies and wage and hour compliance.
Sharleen Tinnin: Sharleen is a 2010 graduate of Northeastern University School of Law, and has been with slnlaw since 2023. Prior to joining slnlaw, she worked with King, Tilden, McEttrick & Brink, P.C. on complex civil litigation matters. She previously worked for the United States Department of Justice, and received an "Excellence in Justice" award in 2017. Sharleen has helped clients with multiple wage and hour issues, including retaliation, misclassification, and late or unpaid wages or commissions, and litigated these claims in state and federal courts.
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Our experienced team can simplify the complexities of overtime pay calculations, empowering you to understand your rights and ensure accurate payment. You can use the button below to schedule a call back from a member of our team, or give us a call at 781-784-2322.
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