What Is Rate of Pay?
The meaning of pay rate is the average hourly rate an employee is paid calculated by dividing the total pay for employment in a work week by the total number of hours actually worked.
The meaning of pay rate is the average hourly rate an employee is paid calculated by dividing the total pay for employment in a work week by the total number of hours actually worked.
By Brad Nakase, Attorney
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The normal rate of pay is what you usually get for the work you do for an employer. This could be either a salary, hourly wages, commissions, or some other method of payment. Of course, this rate of payment will have to equal, or be above, the minimum wage. This normal rate of payment maxes out at eight hours per day and 40 hours per week. This maximum can also be swayed by how many consecutive days you work.
There is another method of ascertaining how much is the maximum allowed time to work without overtime. This entails working four days for 10 hours each day, or three days for 12 hours each day. The end result is based off of a 40-hour workweek.
Whatever agreement is made between an employee and employer, it has to be for less than the legal limit for normal hours. You may agree to work for 35 hours in a given week, but that does not mean you will get overtime if you work more than that, but less than 40 hours. The exception is if you work over than 8 hours in a single day. You will still get paid for the time you worked if it is less than 40 hours. However, it will be at your normal rate of pay. If you believe that your employer has cheated your rate pay, please contact our San Diego employment lawyer for workers.
To help illustrate how the regular payment rate is calculated, here are a few examples.
There are a few different payment types not included within the normal payment rates. For example, gifts for special occasions are not included. Also not included are payments made during times when work was not conducted. These include the following:
If a nonexempt employee works more than 8 hours per workday, then he or she is entitled to overtime pay. An employee on an alternative workweek schedule, who works ten-hour days, is permitted overtime pay if he or she works more than those ten hours.
Unless otherwise indicated, a workday lasts from 12:01 AM to midnight. This means that an employee who works 8 hours on Monday and then an additional hour at 1 AM on Tuesday is not eligible for overtime. This is because the nine hours of work are technically extended over two workdays.
Example: Carla’s workday lasts from 12:01 AM to midnight. On Monday, she works ten hours in a row, from 4 PM to 2AM. Technically, Carla does not qualify for overtime pay. This is because the last two hours of her work, from 12 AM to 2 AM, fall on Tuesday. So, Carla’s ten hours are split between two workdays, making her ineligible for overtime pay.
It should be noted that employers are not allowed to alter work start and end times unless there is a valid business reason to do so. Also, employees should receive overtime pay for working over 8 hours even if they normally work eight or fewer hours a day.
Employees who normally work less than 8 hours a day are not allowed overtime pay if they are working the full 8 hours. They would receive their regular rate of pay until the 8 hours are reached.
Nonexempt workers who work more than forty hours in the same week are entitled to overtime pay. However, an employee who works more than forty hours within a weeklong period does not earn overtime pay if the forty hours spanned two separate weeks.
It should be noted that a worker’s per-day overtime hours may not count toward his or her weekly overtime hours. An employee must work at least forty hours at a normal rate before receiving overtime for working more than forty hours in a week. This is true even if the worker already receives overtime pay for working more than eight hours in a day. The purpose of this rule is to prevent “pyramiding,” a tactic employees might use to receive double-credit for hours worked.
People who typically work less than 40 hours a week are not eligible for overtime pay if they work a total 40 hours. Until the forty hours is reached, they would receive their typical wage.
In California, laws related to overtime do not apply to exempt employees. Similarly, wage and hour laws, such as those mandating rest and meal breaks, are not relevant for exempt workers.
To be an exempt worker, an individual must meet both the following requirements:
Example: Georgia is the manager of a comic book shop. She has the power to fire and hire employees, and she is in charge of making the decision what comics to purchase. Her job is primarily focused on management and administrative matters. Georgia has a yearly salary of $45,000. This amount is below California’s $58,240 minimum salary for the white-collar exemption. This means that the owners of the comic book shop owe Georgia overtime pay when she works extra hours.
It should be noted that exempt employees who work by the hour must be paid overtime. However, their overtime compensation should be no greater than their normal pay unless otherwise stated in their employment agreement.
In California, workers with an alternative schedule do not qualify for overtime pay. An alternative workweek is an agreement between an employer and a selection of workers that means the employees may work as much as ten hours a day without overtime compensation.
For this arrangement to qualify as a legitimate exception to overtime laws in California, at least two-thirds of affected workers must agree by secret vote to the alternative workweek schedule. The employer must also send the alternative schedule to the Division of Labor Standards Enforcement within thirty days. However, if employees work more than the number of hours allowed by the schedule, then they are owed overtime pay. They are also owed overtime pay if they work more than forty hours in a single week.
It should be noted that employees are allowed to voice their opinions about alternative workweeks without fear of retaliation from their employer.
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