Making Cents: How to Properly Calculate Overtime Under the FLSA

Calculating overtime pay properly under the federal Fair Labor Standards Act is not as simple as many employers believe, a payroll expert said May 18.

Many employers calculate overtime pay by multiplying an employee’s hourly rate of pay by 1.5 for all overtime hours worked, said Marie Esposito, director of enterprise payroll for The Heritage Group. However, this is not how the federal Labor Department’s Wage and Hour Division does its computations.

“Normally, when we are trying to calculate normal overtime, you think in your mind because you’ve been doing payroll for so long that for anything over 40, the ...