Proper Calculation of Overtime Pay When An Employee Works Two Jobs for the Same Employer
The U.S. Department of Labor recently issued an opinion letter on how to properly calculate overtime pay for employees working two different jobs at two different rates of pay.
As noted above, opinion letters represent the DOL’s official position on a particular question from an employer or other entity, and provide guidance to other employers facing similar circumstances. With regard to an employee working two jobs at different rates of pay, the employee’s regular rate of pay for the workweek is the weighted average of the two rates. The employee’s total earnings for the workweek from both jobs are added and then divided by the total number of hours worked at both jobs to determine the regular hourly rate, which may then be used to calculate the overtime premium (i.e. 1½ times the regular rate for all hours worked over 40 in the workweek). The DOL then provided an actual example of a tipped employee who works as a server and a bartender, showing the calculation of straight-time wages, the regular rate, and overtime pay.