The most common overtime lawsuits we see in our class action practice are companies that pay their employees straight-time for overtime. This means when the employees work over 40 hours a week, the company pays them the same hourly rate they normally pay. The overtime law requires all hours over 40 be paid at a premium. Normally the overtime pay is one and one half of the regular rate.
What is straight time?
Straight time is equal to to the total hours an employee works in a day or a week.
Example: If employees are required to work 8 hours a day 5 days a week, you would enter 40 hours for straight time in the work week for calculating overtime.
How is straight time used to calculate overtime?
An employee is paid work week overtime for hours they work over 40 hours in a single week. Any hours over 40 is overtime pay. Overtime rate is 1.5 of the hourly rate.
Why paying straight time for overtime is illegal
The overtime law requires overtime to be paid at a premium. Paying employees their regular rate for their straight time denies them of overtime if they worked over 40 hours a week.
Example: George gets paid $10 an hour. He works 50 hours of straight time that week. The first 40 hours is $10 an hour. The 41-50th hours should be paid at $15 an hour.
$10 x40 = $400 + $15×10=150 = $550.
If the employer paid George $10 for 50 hours that week, he would be short.
$10x 50= $500
