If my overtime rates are being averaged with one another, is that legal?

UPDATED: Feb 17, 2012

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If my overtime rates are being averaged with one another, is that legal?

I work “part-time” in a group home. I receive 2 hourly rates based on if the residents are sleeping or not. My regular (when the guys are awake) rate is $9.60; the sleeping rate is $7.40. I receive pay bi-weekly, last paycheck was regular hours 40 hours and regular OT was 11 hours, sleep time 34 hours and sleep time OT 7 hours. Now, this is my issue, they didn’t pay me my regular OT rate of $9.60+1/2 or sleeping OT $7.40+1/2. They averaged them both to $8.62+1/2. Can they do that legally? Also, I work 36 scheduled work hours a week, can I argue to receive full-time status?

Asked on February 17, 2012 under Employment Labor Law, Michigan


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 11 years ago | Contributor

When an employee is paid at two different rates, the employer may indeed average them to determine the effective rate for overtime. It should be a weighted average: rate 1 x hours at rate 1 + rate 2 x hours at rate 2 divided by total number of hours. For a simple example, say that an employee's two rates are $20 and $10 per hour, and he worked 50 hours total--30 at $20, 20 at $10. He earned a total of 30 x $20 + 20 x $10 = $600 + $200 = $800 for working 50 hours; his effective hourly rate is therefore $800/50 = $16/hour, and his overtime would be based on that.

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