What is overtime?
Overtime refers to any hours worked by an employee that exceed their normally scheduled working hours. While a generalized overtime definition refers simply to those hours worked outside of the standard working schedule, overtime commonly refers concurrently to the employee’s remunerations of such work. The overtime rate of pay varies between companies and by specifics of the overtime, such as the number of overtime hours worked. Standard overtime rates include time and a half and double time.
To calculate hourly overtime rate, multiply normal rate of pay by the company’s overtime rate. To find total overtime wages, simply multiply the amount of overtime hours worked by the calculated rate of overtime. For example, a $10 hourly rate at time and a half pay would equal $15 hourly (10 x 1.5). 8 hours worked at that rate would yield $120 (8 x 15).
Legally, by the Fair Labor Standards Act passed in 1938, any hours worked by an employee which exceed the standard 40-hour work week define overtime hours and are subject to overtime remuneration rates.