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Enron Mail |
Here, at last, is the email response to the OT questions. I haven't had a
chance to study it, but I am sending it "hot off the press" upon receipt by me. Let's discuss if there are any problems. Michelle ------------------------------------------------------------------------------ --------------------------- Michelle Cash Enron North America Corp. 1400 Smith Street, EB 3823 Houston, Texas 77002 (713) 853-6401 michelle.cash@enron.com This message may contain confidential information that is protected by the attorney-client and/or work product privileges. ----- Forwarded by Michelle Cash/HOU/ECT on 06/21/2000 04:14 PM ----- "Thomson, Mary Lee" <MLThomson@LITTLER.com< 06/21/2000 04:06 PM To: "'Michelle Cash'" <michelle.cash@enron.com< cc: "Notestine, Kerry" <KNotestine@littler.com< Subject: Overtime Calculations As we discussed on the telephone last week, the federal Fair Labor Standards Act and Department of Labor regulations prescribe the calculation of the regular rate of pay for overtime pay calculation. Shift differentials and other adjustments for working particular hours or on particular tasks are included in the regular rate of pay. If, as set forth in the e-mail forwarded to me from Kerry, an employee is paid a shift differential for night shift work, that differential becomes part of the regular rate of pay for the night shift work. If the same employee rotates between day and night shifts, she/he will be working at two different rates of pay. This is acceptable but poses special issues for the calculation of overtime. Federal law permits two methods of calculating overtime for employees who work at two (or more) different regular rates of pay. Employers may use either a weighted average (29CFR 778.115) or a rate-in-effect (29CFR 778.419) calculation. l. Weighted Average Calculation This calculation involves add multiplying the number of hours worked in a workweek at rate 1 times rate 1 and adding the sum to the number of hours worked at rate 2 times the number of hours worked at rate 2. The sum is then divided by the total number of hours worked to obtain the weighted average regular rate paid for each hour worked. Overtime premiums of 1/2 the weighted average regular rate are then paid to bring the overtime rate to 1.5 times the weighted average regular rate. If, as in California, double time rates apply, the premium would be one times the weighted average regular rate. Example: Employee works four 8-hour day shifts at $10 per hour and two 8-hour night shifts with a shift premium of $! per hour within the same workweek. The weighted average calculation would be: 32 (hours) times 10 (dollars) plus 16 (hours) times 11 (dollars) = 496 (dollars) 496 (dollars) divided by 48 (hours) = $10.33 (the weighted average regular rate) 1/2 of $10.33 = $5.17 (the additional overtime premium due for each overtime hour worked). The weekly pay for this employee would be: $584.00 for straight time $ 41.36 for overtime premium or $625.36 for the week. 2. Rate-in-effect With this method, the overtime pay is calculated at the rate in effect at the time the overtime is worked. In the above example, if the last 8 hours of the week were worked on a day shift, the overtime rate would be 1.5 x $10 or $15 and the employee would be entitled to $120 in overtime pay. If the last shift was worked on the night shift, the overtime rate would be 1.5 x $11 or $16.50 and the employee would be due $130 in overtime pay. Please note: These are the federal standards. State law must also be considered, since the employee is entitled to the most favorable provision is there is a conflict. For example, California does not permit the use of the rate-in-effect method; employees who work at different rates must be paid on the weighted average overtime pay calculation. I hope this is helpful. Please do not hesitate to call if you questions or need clarification. Mary Lee Thomson Sacramento, CA ---- This email may contain confidential and privileged material for the sole use of the intended recipient(s). Any review, use, distribution or disclosure by others is strictly prohibited. If you are not the intended recipient (or authorized to receive for the recipient), please contact the sender by reply email and delete all copies of this message. To reply to our email administrator directly, send an email to postmaster@littler.com Littler Mendelson, P.C. http://www.littler.com
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