X

News & Insights

 
13Apr

Overtime and Blended Rates

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.

Related

Assuring Fair Process in Pennsylvania - Open Meetings, Right to Know, and Conflicts of Interest

Assuring Fair Process in Pennsylvania - Open Meetings, Right to Know, and Conflicts of Interest

Questions about the fairness of the contract negotiation process with a school district or school bo...

Read More >
Keeping Up with Evolving Pennsylvania Marijuana Laws

Keeping Up with Evolving Pennsylvania Marijuana Laws

Despite the Pennsylvania Medical Marijuana Act (the “PMMA”), being passed over five (5) years ago,...

Read More >
Non-Competes and Severance Agreements: How Recent Changes May Affect Your Business

Non-Competes and Severance Agreements: How Recent Changes May Affect Your Business

In recent months, the legal landscape regarding employee non-competes and non-disparagement terms in...

Read More >

School Bus Interstate Operations: An Overview

For most school transportation contractors in Pennsylvania, the majority of transportation services ...

Read More >
Legal Focus: Assuring Compliance with the Fair Credit Reporting Act

Legal Focus: Assuring Compliance with the Fair Credit Reporting Act

School bus contractors are required to comply with many laws and regulations to ensure legal complia...

Read More >

2018 Decisions Bring Changes for Employers and Labor Unions

The landscape of decisions that effect employers and labor unions has changed in 2018 demonstrated b...

Read More >

Search

Categories