How do I Calculate a Blended Overtime Rate for a Tipped Employee?

by Oliver
(NYC)

I have a bartender who worked 21.79 @ $8/hour (AM shift) and 18.21 hours @ $4.65 (PM shift) and 2 hours overtime during the $8/hour AM shift.


How do I calculate his overtime?

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Calculating Blended Overtime
by: Best Business Payroll

The Department of Labor refers to your situation as "blended" overtime. Blended overtime is when you have one employee working at multiple pay rates in the same pay period. The employee's earnings from all rates are added together and the total is divided by the number of hours worked by the employee at all jobs.

For example, if an employee works 3 different rates you would figure their blended rate this way:

10 hours x $10.00 = $100.00
15 hours x $12.00 = $180.00
20 hours x $15.00 = $300.00
45 hours =$580.00

Now take $580 and divide by 45 hours and you get a average or "blended" rate of $12.89. That is the rate that you figure time and a half by for that employee.

If you would like more information, refer to the FLSA (Fair Labor Standards Act), which is enforced by the Department of Labor (http://www.DOL.gov)

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