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Q.How do you calculate pay and overtime for a salaried, nonexempt employee?
A.For employees who are not paid a regular hourly rate (such as those whose compensation is determined on a salary, piece-rate, or commission basis), the regular hourly rate of pay is determined by dividing the salary by the number of hours the salary is intended to compensate. For example, assume the employee is hired at a salary of $400 per week and the employee is expected to work a regular 40 hour week. The employee’s regular hourly rate of pay is $10 ($400 divided by 40). If the employee works overtime, the employee would be entitled to $154 for each hour of overtime.
Now assume the employee is hired at an annual salary of $25,000 and this salary is compensation for a regular 40 hour week. The employee’s regular hourly rate of pay is $12.02 ($25,000 annual salary divided by 2080 hours, number of hours in a year based on a 40 hour work week). The employee is therefore entitled to $18.03 for each hour of overtime.
If you would like assistance with filing a California wage claim with either the California Labor Commissioner or a California Small Claims Court, call 818-849-5206 or email Melissa C. Marsh, Esq. to speak with a licensed California attorney. Mention this article and receive a 30-minute consultation for just $99.
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