Pay plan OT40
Overtime is calculated for all hours worked in excess of 40 hours in one week. Overtime is usually calculated at half the shift rate where it occurs. The average overtime rate is used if call pay or premium pay increases the average pay rate for a week. This is calculated as follows:
- Add the total hours worked for the one week in which overtime hours occur.
- Multiply the hours worked by the shift rate to get the gross amount per shift for the week before overtime. Add all gross amounts.
- Divide the total gross amount by the total hours worked for the week to get the average pay rate.
- Divide the average pay rate by 2 for the overtime rate for that week.
- Multiply the overtime hours worked on each shift in each week by the overtime rate for that week. The overtime rate that is used is the greater of either half the shift rate or the average overtime rate.
Example: If a pay plan OT40 employee worked the following hours per shift, the overtime is calculated accordingly:
Hours | Shift | Rate | Total | Total w/ Overtime |
| 8.00 | Shift 1 | $10.00 | $ 80.00 | $ 80.00 |
| 2.00 | Shift 1 OT | $10.00 | $ 20.00 | $ 31.50 |
| 30.00 | Shift 2 | $11.00 | $330.00 | $330.00 |
| 2.00 | Shift 3 | $11.50 | $ 57.50 | $ 57.50 |
| 3.00 | Shift 3 OT | $11.50 | $ 34.50 | $ 51.75 |
| | Call pay | $15.00 | $ 15.00 | $ 15.00 |
| 45.00 | | | $502.50 | |
| | | | | |
| 8.00 | Holiday | $10.00 | $ 80.00 | $ 80.00 |
| 53.00 | | | $582.50 | $610.92 |
Total overtime hours 53 - 40 - 8 (holiday hours) = 5.0
$502.50 (gross pay before holiday/45 (worked hours) = $11.17 average pay rate
$11.17 (avg. pay rate) / 2 = $5.58 average overtime pay rate
2 hours (shift one OT) x ($10.00+$5.58) (base rate + aver OT pay rate) = $31.17 total pay
3 hours (shift 3 OT) x (11.50+5.75) (shift 3 base rate*1.5) = $51.75 total pay
On the third shift the $5.75 regular overtime rate is higher than the average overtime rate of $5.58
Most nonexempt employees are on the Overtime 40 plan. Depending on the number of hours worked and the shifts worked, an employee's overtime rate may vary from week to week.