News & Insights

In school bus operations, most employees are part-time drivers that do not exceed 40 hours of work in a workweek; however, nearly all contractors have some full-time staff that work 40 hours per week. Occasionally, an employee may be assigned to two jobs with different rates of pay, such as a bus driver and office administrator. Accordingly, contractors may decide to pay these employees two different rates of pay, depending on the job being performed. In such cases, there are special considerations for overtime. Continue reading to learn more on overtime requirements, and how overtime works when an employee has different rates of pay.

The Fair Labor Standards Act (“FLSA”) requires employers to pay employees overtime for each workweek that an employee works more than 40 hours. 29 U.S.C.A. §207(a)(1). For all hours worked in excess of 40 hours, the employee is entitled to additional compensation at a rate not less than one and one-half times the regular rate at which he or she is employed. Id. In some cases, employees are exempt from overtime. Exempt employees must be salaried and make no less than $684/week ($35,568/year), and must also perform certain job duties characterized under federal regulations as administrative, professional, or executive duties. 29 C.F.R. §§541.100-402, 541.60;. It is worth noting that in most cases, school transportation contractor employees will not satisfy the job duties threshold, and therefore would not be exempt from overtime; however, contractors should evaluate each employee on a case-by-case basis.

As mentioned, employees who are required to be paid overtime will be paid an overtime rate equal to their regular rate, plus one half of their regular rate. The regular rate of pay is defined as an “hourly rate”, and “a matter of mathematical computation”. 29 C.F.R. §§778.108, 778.109. For employee’s who are paid a single hourly rate, the calculation is simple. For example, if an employee is paid $20/hour and works 50 hours a week, the employer would pay the regular rate of pay of $20/hour for all hours worked, plus one half for the 10 hours of overtime. For employees who perform multiple jobs, and are therefore paid more than one rate, the employer must calculate total weekly pay and divide by all hours worked to determine the “blended” regular rate of pay. For example, each week an employee works 20 hours as a dispatcher ($18/hour), 12 hours as a driver ($28/hour), and 18 hours as a bus aide ($17/hour). In this case, the employer would divide $1002 (total weekly pay) by 50 (number of hours worked), which would result in a blended rate of $20.04, which can be used as the regular rate of pay.

Contractors must be mindful of overtime, and should regularly evaluate exempt status of employees, as well ensure that overtime is being calculated correctly especially when using a blended rate. If you are evaluating overtime pay for your employees, or have questions on above, contact help@rckelly.com or call us at 215-896-3846.