Calculating OT correctly for non-exempt employees can be complicated. The complication often revolves around the fact that there is one definition of a overtime rate but there are multiple ways to calculate the total overtime and straight time compensation owed to an employee. If the underlying components of the OT computation are correctly calculated then the different methodologies should yield equivalent total compensation amounts .
Background
Under FLSA, non-exempt employees are paid OT at a rate of one and half times the regular rate. The regular rate of pay is based on the individuals total compensation, which includes the employee’s base rate of pay and certain bonuses and total hours worked in the work week. Generally, under FLSA OT is paid on all hours above 40 in a work week.
The FLSA does not explicitly define a work week(http://biznik.com/articles/department-of-labor-approves-9-day-work-schedule-w-o-overtime.) For some employees a work week is typically defined as a 7-day Sunday to Saturday time period. For some job positions, like fire fighters and employees on alternative week schedules the employers overtime rate calculation is based on a different work week schedule. The 9-80 work week is an example of a compressed work week schedule. ( http://www.wage-hour.net/post/2012/05/26/What-Is-A-980-Pay-Plan.aspx) Under the compressed work week the employee works 9 days in a two week period but not more than 40 hours in either workweek. According to Fisher Phillips:
Under a typical 9/80 arrangement, the non-exempt employee works four 9-hour days, followed by an 8-hour workday day that is split into 4-hour portions by the mid-day ending of the first workweek, and then works four more 9-hour days in the second workweek. The key is that the employee’s workweek ends during the 8-hour workday, causing the first four hours worked that day to fall into one workweek and the remaining four hours worked that day to fall into the next workweek. In this way, the employee’s hours worked in each workweek do not exceed 40.
There are certain conditions that the employer must meet to be able to switch to a compressed work week.
Law enforcement and fire protection employees also typically have a different work week. (http://www.dol.gov/whd/regs/compliance/whdfs8.pdf). For these employees,
A “work period” may be from 7 consecutive days to 28 consecutive days in
length. For work periods of at least 7 but less than 28 days, overtime pay is required when the number of hours worked exceeds the number of hours that bears the same relationship to 212 (fire) or 171 (police) as the number of days in the work period bears to 28.
In certain states, like California, individuals are paid OT on the hours above 8 worked in a day. In California, individuals are generally paid double time or 2 times their regular rate of pay, on hours worked in excess of 12 in a day. There is no provision for double time under the FLSA.
In California, employers may adopt what are known as Alternative Work Week Schedules that define a workweek differently from the standard 7 day time period or 5 day, 40 hour week from Monday to Friday. Before adopting an alternative work week schedule the employer must meet certain criteria and the alternative work week must be approved by the employees in an election. Alternative work week schedules include 4/40, 8/80 and 9/80. (http://www.calhr.ca.gov/employees/pages/alternate-work-week-policy.aspx)
This site provides a database of the Alternative Work Week adoptions for the State of California. http://www.dir.ca.gov/databases/oprl/DLSR-AWE.html. See also http://www.calpeculiarities.com/2013/05/29/tired-of-the-9-5-grind-consider-an-alternative-workweek-schedule/
