How is the overtime rate of pay calculated?

The overtime rate of pay is calculated at 1.5 times the regular rate of pay. This standard is established under the Fair Labor Standards Act (FLSA), which mandates that non-exempt employees receive this premium for hours worked beyond the standard 40 hours in a workweek. This approach is intended to compensate employees for the additional burden of working longer hours, recognizing that extended work hours can impact their well-being and work-life balance.

Calculating overtime at the rate of 1.5 times the regular hourly wage provides a financial incentive for employers to manage staffing effectively while also ensuring that employees are fairly compensated for their time. This policy is important in promoting a fair work environment and supporting employee rights.